Jetblue Has a Bit of a Rough Landing in Q2

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When JetBlue Airways Corp. (NASDAQ: JBLU) reported its most recent quarterly results before the markets opened on Tuesday, the airline posted $0.38 in earnings per share (EPS) and $1.93 billion in revenue. The consensus estimates had called for $0.36 in EPS and revenue of $1.93 billion. The second quarter of last year reportedly had EPS of $0.64 on $1.84 billion in revenue.

In the second quarter, revenue per available seat mile (RASM) decreased 1.2% year over year, including 2.5 points of negative impact from holiday travel that shifted into the first quarter, as well as lapping a 1.25 point benefit that occurred in the second quarter of 2017 from completion factor and co-brand incentive payments.

At the same time, operating expenses per available seat mile, excluding fuel (CASM ex-fuel) grew 1.9%, slightly better than the initial guidance range of 2.0% to 4.0%, partially driven by the timing of expenses from the second into the third quarter of 2018 and higher completion factor.

Looking ahead to the third quarter, the company expects to see capacity to increase between 7.5% and 9.5% year over year; RASM growth is expected to range between flat and 3.0%; and CASM ex-fuel is expected to grow between 1.0% and 3.0%. The consensus estimates call for $0.58 in EPS and $2.04 billion in revenue for the quarter.

Robin Hayes, JetBlue’s CEO, commented:

Our financial performance was impacted by the holiday calendar, but more importantly, by fuel prices that increased over 40% year over year. The team is focused on mitigating the impact of higher fuel in order to stabilize and improve our margins. We are planning a series of adjustments to both capacity and our ancillary revenue to take effect over the coming months.

Shares of JetBlue were last seen down about 8% at $18.24, with a consensus analyst price target of $22.68 and a 52-week trading range of $18.05 to $24.13.