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JetBlue Airways (JBLU) Posts Narrower-Than-Expected Q3 Loss

Uptick in passenger revenues aid JetBlue's (JBLU) Q3 results.

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This story originally appeared on Zacks

JetBlue Airways JBLU incurred a third-quarter 2021 loss (excluding 52 cents from non-recurring items) of 12 cents per share, comparing favorably with the Zacks Consensus Estimate of a loss of 19 cents. This was the seventh successive quarterly loss posted by this currently Zacks Rank #4 (Sell) low-cost carrier. 

- Zacks

Quarterly loss per share was also narrower than the year-ago loss of $1.75. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

JetBlue Airways Corporation Price, Consensus and EPS Surprise

JetBlue Airways Corporation Price, Consensus and EPS Surprise

JetBlue Airways Corporation price-consensus-eps-surprise-chart | JetBlue Airways Corporation Quote

Operating revenues of $1,972 million skyrocketed 300.8% year over year and also surpassed the Zacks Consensus Estimate of $1,927.9 million. This massive year-over-year jump reflects improving air-travel demand as more and more people take to the skies following widespread vaccination. Revenues increased 31.5% sequentially. However, compared with the third-quarter 2019 actuals, quarterly revenues declined 5.5%.

Passenger revenues, which accounted for the bulk of the top line (94.1%), increased to $1,856 million in third-quarter 2021 from a mere $445 million a year ago when the impact of coronavirus on air-travel demand was much severe. Other revenues surged in excess of 100% to $116 million. Capital expenditures in the reported quarter came in at $263 million.

Other Details

All comparisons are presented on a year-over-year basis. Revenue per available seat mile (RASM: a key measure of unit revenues) in the reported quarter improved 71.2% to 12.20 cents. Passenger revenue per available seat mile (PRASM) surged 78.2% to 11.48 cents owing to better air-travel demand. Average fare at JetBlue during the quarter slid 1.1% to $204.50. Yield per passenger mile dropped 4.8% year over year to 14.37 cents.

Reflecting the uptick in air-travel demand, consolidated traffic (measured in revenue passenger miles) skyrocketed 338.5% in the reported quarter. To cater to this increased demand, capacity (measured in available seat miles) expanded 134.1% to 16,168 million. Consolidated load factor (percentage of seats filled by passengers) increased 37.3 percentage points to 79.9% in the third quarter of 2021.

In the third quarter, total operating expenses (on a reported basis) escalated 77.1% to $1,786 million, mainly due to a 335.3% rise in aircraft fuel and related taxes. Average fuel price per gallon (including related taxes) climbed to $2.08 from $1.23 a year ago as oil prices move north.

JetBlue’s operating expenses per available seat mile (CASM) fell 24.3% to 11.04 cents. Excluding fuel, the metric declined 35.9% to 9.39 cents.

JetBlue exited the third quarter of 2021 with cash and cash equivalents of $2,193 million compared with $1,918 million at the end of 2020. Total debt at the end of the reported quarter was $4,151 million compared with $4,863 million at 2020 end.

The carrier exited the September quarter with $3.3 billion of unrestricted cash, cash equivalents and short-term investments. Adjusted EBITDA in the quarter was $140 million.

Outlook

Revenues for the fourth quarter of 2021 are expected to decline in the 8-13% range from the fourth-quarter 2019 actuals.  Capacity is anticipated to decline in the 4-7% range in the December quarter from the figure reported in the fourth quarter of 2019. Average fuel cost per gallon in the December quarter is estimated to be $2.49. 

Fuel consumption is expected to be roughly 198 million gallons in the fourth quarter of 2021. Capital expenditures in the December quarter and full year 2021 are anticipated to be roughly $200 million and $1 billion, respectively.

Adjusted EBITDA in the final quarter of 2021 is expected between - $50 million and $50 million. The metric is likely to be dented by increased fuel costs and a spike in expenses on labor.

CASM (ex-fuel) is expected to increase in the 14-16% band in the December quarter from the recorded fourth-quarter 2019 levels. The company, which expects unit costs to decline substantially in the second half of 2022, targets next year’s CASM (ex-fuel) to increase only in low-single digits from the 2019 levels.

How Other Airlines Fared

Let’s take a look at some of the other recently-released earnings reports of companies from within the Zacks  Airline  industry.

American AirlinesAAL third-quarter 2021 loss (excluding $1.24 from non-recurring items) of 99 cents per share compared favorably with the Zacks Consensus Estimate of a loss of $1.04. Quarterly loss per share was also narrower than the year-ago loss of $5.54.

Operating revenues of $8,969 million skyrocketed 182.67% year over year and also surpassed the Zacks Consensus Estimate of $8,926.6 million. This massive year-over-year jump reflects improving air-travel demand.

Southwest Airlines LUV, incurred a loss (excluding 96 cents from non-recurring items) of 23 cents per share in the third quarter of 2021, narrower than the Zacks Consensus Estimate of a loss of 27 cents. Operating revenues of $4,679 million outperformed the Zacks Consensus Estimate of $4,581.5 million.

United Airlines UAL, incurred a loss (excluding $2.46 from non-recurring items) of $1.02 per share in the third quarter of 2021, narrower than the Zacks Consensus Estimate of a loss of $1.65. Operating revenues of $7,750 million surpassed the Zacks Consensus Estimate of $7639.7 million.



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