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JetBlue (JBLU) Up 1.6% Since Last Earnings Report: Can It Continue?
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A month has gone by since the last earnings report for JetBlue Airways (JBLU - Free Report) . Shares have added about 1.6% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is JetBlue due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
JetBlue Posts Loss in Q1
JetBlue incurred a loss (excluding 70 cents from non-recurring items) of $1.48 per share, comparing favorably with the Zacks Consensus Estimate of a loss of $1.62. Results were hurt by the coronavirus-induced weakness in air-travel demand. In the first quarter of 2020, JetBlue reported a quarterly loss of 42 cents per share.
Moreover, in first-quarter 2021, operating revenues of $733 million plunged 53.8% year over year due to the 55.7% decrease in passenger revenues, which accounted for bulk (91.4%) of the top line. Revenues from other sources also declined 18% to $63 million. The top line, however, surpassed the Zacks Consensus Estimate of $716.4 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 dropped 24.5% to 8.06 cents. Passenger revenue per available seat mile (PRASM) fell 27.5% to 7.36 cents. Average fare at JetBlue during the quarter declined 19.1% to $149.97. Yield per passenger mile dropped 20.8% year over year to 11.52 cents.
Capacity, measured in available seat miles, contracted 39%. Traffic, measured in revenue passenger miles, plummeted 44.1% due to softness in air-travel demand. Load factor (percentage of seats filled by passengers) fell to 63.9% from 69.8% a year ago as traffic decline was more than the capacity reduction in the reported quarter.
In the first quarter, total operating expenses (on a reported basis) decreased 46.6% year over year, mainly owing to a 47% fall in aircraft fuel and related taxes. With major part of the fleet remaining grounded/under-utilized, fuel gallons consumed tanked 42.8% to $112 million.
Average fuel cost per gallon (including fuel taxes) declined 7.4% to $1.72. JetBlue’s operating expenses per available seat mile (CASM) fell 12.5% to 11.30 cents. Excluding fuel, the metric escalated 36% to 12.25 cents.
JetBlue exited the first quarter of 2021 with cash and cash equivalents of $2,358 million compared with $1,918 million at the end of 2020. Total debt at the end of the reported quarter was $5,082 million compared with $4,863 million at 2020 end.
The carrier exited the March quarter with $3.2 billion in unrestricted cash, cash equivalents and short-term investments.
Outlook
Revenues for the second quarter of 2021 are expected to decline in the 30-35% range from the second-quarter 2019 actuals. Capacity is anticipated to contract at least 15% in the June quarter from the figure reported in the second quarter of 2019. Operating expenses are expected to be roughly 8% down from the recorded second-quarter 2019 levels. Average fuel cost per gallon in the June quarter is estimated to be $1.87. EBITDA is expected in the range of a negative $100-$200 million. The company expects to reach breakeven in the third quarter of 2021, on an EBITDA basis.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended upward during the past month. The consensus estimate has shifted -8.36% due to these changes.
VGM Scores
Currently, JetBlue has a poor Growth Score of F, a grade with the same score on the momentum front. Charting a somewhat similar path, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, JetBlue has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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JetBlue (JBLU) Up 1.6% Since Last Earnings Report: Can It Continue?
A month has gone by since the last earnings report for JetBlue Airways (JBLU - Free Report) . Shares have added about 1.6% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is JetBlue due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
JetBlue Posts Loss in Q1
JetBlue incurred a loss (excluding 70 cents from non-recurring items) of $1.48 per share, comparing favorably with the Zacks Consensus Estimate of a loss of $1.62. Results were hurt by the coronavirus-induced weakness in air-travel demand. In the first quarter of 2020, JetBlue reported a quarterly loss of 42 cents per share.
Moreover, in first-quarter 2021, operating revenues of $733 million plunged 53.8% year over year due to the 55.7% decrease in passenger revenues, which accounted for bulk (91.4%) of the top line. Revenues from other sources also declined 18% to $63 million. The top line, however, surpassed the Zacks Consensus Estimate of $716.4 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 dropped 24.5% to 8.06 cents. Passenger revenue per available seat mile (PRASM) fell 27.5% to 7.36 cents. Average fare at JetBlue during the quarter declined 19.1% to $149.97. Yield per passenger mile dropped 20.8% year over year to 11.52 cents.
Capacity, measured in available seat miles, contracted 39%. Traffic, measured in revenue passenger miles, plummeted 44.1% due to softness in air-travel demand. Load factor (percentage of seats filled by passengers) fell to 63.9% from 69.8% a year ago as traffic decline was more than the capacity reduction in the reported quarter.
In the first quarter, total operating expenses (on a reported basis) decreased 46.6% year over year, mainly owing to a 47% fall in aircraft fuel and related taxes. With major part of the fleet remaining grounded/under-utilized, fuel gallons consumed tanked 42.8% to $112 million.
Average fuel cost per gallon (including fuel taxes) declined 7.4% to $1.72. JetBlue’s operating expenses per available seat mile (CASM) fell 12.5% to 11.30 cents. Excluding fuel, the metric escalated 36% to 12.25 cents.
JetBlue exited the first quarter of 2021 with cash and cash equivalents of $2,358 million compared with $1,918 million at the end of 2020. Total debt at the end of the reported quarter was $5,082 million compared with $4,863 million at 2020 end.
The carrier exited the March quarter with $3.2 billion in unrestricted cash, cash equivalents and short-term investments.
Outlook
Revenues for the second quarter of 2021 are expected to decline in the 30-35% range from the second-quarter 2019 actuals. Capacity is anticipated to contract at least 15% in the June quarter from the figure reported in the second quarter of 2019. Operating expenses are expected to be roughly 8% down from the recorded second-quarter 2019 levels. Average fuel cost per gallon in the June quarter is estimated to be $1.87. EBITDA is expected in the range of a negative $100-$200 million. The company expects to reach breakeven in the third quarter of 2021, on an EBITDA basis.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended upward during the past month. The consensus estimate has shifted -8.36% due to these changes.
VGM Scores
Currently, JetBlue has a poor Growth Score of F, a grade with the same score on the momentum front. Charting a somewhat similar path, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, JetBlue has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.