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JetBlue Airways shares fell about 13% Monday afternoon as the New York-based airline headed into its third-quarter earnings report with sharply higher fuel costs and a turnaround plan still working toward sustained profitability.
The stock was quoted at $2.275, down 13.33%, at 1:54:51 p.m. EDT on October 26 in market data displayed by Yahoo Finance. That is an intraday snapshot, not a closing price.
JetBlue is scheduled to discuss its third-quarter results Tuesday, October 27, at 10 a.m. EDT, according to its earnings-call announcement. The report will provide a more recent view of the airline’s finances than its midyear results and September guidance.
In a September 10 regulatory disclosure, JetBlue raised its expected third-quarter fuel price to $3.96 a gallon from $3.49. That estimate included fuel taxes and fees and was based on the forward fuel curve as of September 4. It is not a statement of today’s spot fuel price.
The airline also raised its forecast for nonfuel unit-cost growth to 6% to 8% from 2.5% to 4.5%. It cited weather and air-traffic-control disruptions in July and August, particularly in its Northeast network.
Revenue expectations improved at the same time. JetBlue projected revenue per available seat mile, an airline pricing and revenue measure, would rise 17% to 20% from a year earlier, compared with its previous 12.5% to 16.5% range. The company said strong demand, pricing and commercial actions were helping offset higher fuel and operational costs. Those figures are September forecasts, not the third-quarter results due Tuesday.
The pressure was already visible in its second-quarter report. Revenue rose 14.5% to $2.7 billion, while operating cost per available seat mile increased 17%. JetBlue paid an average $4.23 a gallon for fuel, about 76% more than a year earlier, and said it recaptured nearly half of the higher fuel costs.
JetBlue’s JetForward program combines network changes, premium products, reliability improvements and cost measures. The company said in July that the program had generated $470 million in cumulative incremental earnings before interest and taxes through June. That management measure describes benefits attributed to the program, not the airline’s total profit.
The company plans to webcast Tuesday’s results call through its investor-relations website and make a replay available afterward.
JBizNews Desk | New York
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