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JetBlue (JBLU) Stock Down Due to Wider-Than-Expected Q2 Loss
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JetBlue Airways (JBLU - Free Report) incurred a second-quarter 2021 loss (excluding 11 cents from non-recurring items) of 47 cents per share, comparing unfavorably with the Zacks Consensus Estimate of a loss of 11 cents. Higher operating expenses hurt the bottom line. This wider-than-expected loss disappointed investors. Consequently, shares of JBLU declined 6.4% on Aug 2.
Quarterly loss per share was narrower than the year-ago loss of 64 cents. Operating revenues of $2,445 million surged 63.1% year over year but fell short of the Zacks Consensus Estimate of $2,468.3 million. This massive year-over-year jump reflects improving air-travel demand.
Passenger revenues, accounting for the bulk of the top line (94.2%), increased to $2,302 million in second-quarter 2022 from $1,388 million a year ago when the impact of coronavirus on air-travel demand was more severe. Other revenues rose 29.6% to $143 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 35.7% to 14.90 cents. Passenger revenue per available seat mile (PRASM) surged 34.9% to 14.03 cents owing to better air-travel demand. Average fare at JetBlue during the June quarter increased 26.6% to $221.38. Yield per passenger mile shot up 28.5% year over year to 16.48 cents.
Reflecting the uptick in air-travel demand, consolidated traffic (measured in revenue passenger miles) improved 29.3% in the reported quarter. To cater to this increased demand, capacity (measured in available seat miles) expanded 20.2% to 16,405 million. Consolidated load factor (percentage of seats filled by passengers) increased 5.9 percentage points to 85.1% in the second quarter of 2022 as traffic growth outpaced capacity expansion.
In the second quarter, total operating expenses (on a reported basis) escalated 89.2% to $2,558 million, mainly due to a 170.7% rise in aircraft fuel expenses and related taxes. Average fuel price per gallon (including related taxes) climbed to $4.24 from $1.91 a year ago, as oil prices move north.
JetBlue’s operating expenses per available seat mile (CASM) increased 57.4% to 15.59 cents. Excluding fuel, the metric declined 3.6% to 9.68 cents.
JetBlue, currently carrying a Zacks Rank #4 (Sell), exited the second quarter of 2022 with cash and cash equivalents of $1,611 million compared with $2,018 million at the end of 2021. Total debt at the end of the reported quarter was $3,822 million compared with $4,006 million at 2021 end. During the quarter, JBLU regularly paid off scheduled debt and finance lease obligations worth $106 million.
Outlook
While providing guidance for third-quarter 2022, management stated that all comparisons are made with respect to the third quarter of 2019. Capacity is anticipated to be flat or decrease up to 3% from third-quarter 2019 actuals. CASM excluding fuel and special items is predicted to rise 15-17%.
RASM is forecast to increase in the 19-23% range. Average fuel cost per gallon in the September quarter is estimated to be $3.68. Capital expenditures in the third quarter are anticipated to be roughly $350 million. Tax rate is anticipated to be 37%. Number of shares are expected to be roughly 325 million. JBLU expects to be profitable in the September quarter.
For 2022, capacity is expected to be flat or increase up to 3% from the 2019 levels. CASM, excluding fuel and special items, is predicted to rise 11-14% from the 2019 actuals. Capital expenditures for 2022 are anticipated to be roughly $1 billion. Current-year interest expenses are forecast in the $160-$170 million band. Tax rate is anticipated to be 15%. Number of shares are expected to be roughly 324 million.
Within the broader Transportation sector, the likes of J.B. Hunt Transport Services (JBHT - Free Report) , CSX Corporation (CSX - Free Report) and United Airlines (UAL - Free Report) reported second-quarter 2022 results. Take a look.
J.B. Hunt reported better-than-expected second-quarter 2022 results, wherein both earnings and revenues outperformed the Zacks Consensus Estimate.
Quarterly earnings of $2.42 per share surpassed the Zacks Consensus Estimate of $1.61 and improved 50.3% year over year. Total operating revenues of $3,837.53 million also outperformed the Zacks Consensus Estimate of $2,908.37 million. The top line jumped 32% year over year on the back of strength in all segments. Total operating revenues, excluding fuel surcharges, rose 21.2% year over year.
Quarterly operating income (on a reported basis) climbed 46.2% to $353.08 million on higher volumes, customer rate and cost-recovery efforts. Operating expenses escalated 30.6% to $3.48 billion.
CSX reported better-than-expected second-quarter 2022 results, wherein both earnings and revenues outperformed the Zacks Consensus Estimate.
Quarterly earnings of 50 cents per share (excluding 4 cents from non-recurring items) beat the Zacks Consensus Estimate of 47 cents and improved 25% year over year.
Total revenues of $3,815 million outperformed the Zacks Consensus Estimate of $3,642.2 million. The top line increased 28% year over year on the back of higher revenues in almost all markets, driven by pricing gains, fuel surcharge and contribution from the acquisition of Quality Carriers. Overall revenues per unit increased 27%.
United Airlines’ second-quarter 2022 earnings (excluding 43 cents from non-recurring items) of $1.43 per share fell short of the Zacks Consensus Estimate of $1.86. Escalated operating expenses induced the earnings miss.
The second quarter of 2022 was the first profitable period at UAL since the onset of the pandemic. Operating revenues at United Airlines came in at $12,112 million, beating the Zacks Consensus Estimate of $12,033.7 million.
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JetBlue (JBLU) Stock Down Due to Wider-Than-Expected Q2 Loss
JetBlue Airways (JBLU - Free Report) incurred a second-quarter 2021 loss (excluding 11 cents from non-recurring items) of 47 cents per share, comparing unfavorably with the Zacks Consensus Estimate of a loss of 11 cents. Higher operating expenses hurt the bottom line. This wider-than-expected loss disappointed investors. Consequently, shares of JBLU declined 6.4% on Aug 2.
Quarterly loss per share was narrower than the year-ago loss of 64 cents. Operating revenues of $2,445 million surged 63.1% year over year but fell short of the Zacks Consensus Estimate of $2,468.3 million. This massive year-over-year jump reflects improving air-travel demand.
Passenger revenues, accounting for the bulk of the top line (94.2%), increased to $2,302 million in second-quarter 2022 from $1,388 million a year ago when the impact of coronavirus on air-travel demand was more severe. Other revenues rose 29.6% to $143 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 35.7% to 14.90 cents. Passenger revenue per available seat mile (PRASM) surged 34.9% to 14.03 cents owing to better air-travel demand. Average fare at JetBlue during the June quarter increased 26.6% to $221.38. Yield per passenger mile shot up 28.5% year over year to 16.48 cents.
Reflecting the uptick in air-travel demand, consolidated traffic (measured in revenue passenger miles) improved 29.3% in the reported quarter. To cater to this increased demand, capacity (measured in available seat miles) expanded 20.2% to 16,405 million. Consolidated load factor (percentage of seats filled by passengers) increased 5.9 percentage points to 85.1% in the second quarter of 2022 as traffic growth outpaced capacity expansion.
In the second quarter, total operating expenses (on a reported basis) escalated 89.2% to $2,558 million, mainly due to a 170.7% rise in aircraft fuel expenses and related taxes. Average fuel price per gallon (including related taxes) climbed to $4.24 from $1.91 a year ago, as oil prices move north.
JetBlue’s operating expenses per available seat mile (CASM) increased 57.4% to 15.59 cents. Excluding fuel, the metric declined 3.6% to 9.68 cents.
JetBlue, currently carrying a Zacks Rank #4 (Sell), exited the second quarter of 2022 with cash and cash equivalents of $1,611 million compared with $2,018 million at the end of 2021. Total debt at the end of the reported quarter was $3,822 million compared with $4,006 million at 2021 end. During the quarter, JBLU regularly paid off scheduled debt and finance lease obligations worth $106 million.
Outlook
While providing guidance for third-quarter 2022, management stated that all comparisons are made with respect to the third quarter of 2019. Capacity is anticipated to be flat or decrease up to 3% from third-quarter 2019 actuals. CASM excluding fuel and special items is predicted to rise 15-17%.
RASM is forecast to increase in the 19-23% range. Average fuel cost per gallon in the September quarter is estimated to be $3.68. Capital expenditures in the third quarter are anticipated to be roughly $350 million. Tax rate is anticipated to be 37%. Number of shares are expected to be roughly 325 million. JBLU expects to be profitable in the September quarter.
For 2022, capacity is expected to be flat or increase up to 3% from the 2019 levels. CASM, excluding fuel and special items, is predicted to rise 11-14% from the 2019 actuals. Capital expenditures for 2022 are anticipated to be roughly $1 billion. Current-year interest expenses are forecast in the $160-$170 million band. Tax rate is anticipated to be 15%. Number of shares are expected to be roughly 324 million.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Earnings Snapshots
Within the broader Transportation sector, the likes of J.B. Hunt Transport Services (JBHT - Free Report) , CSX Corporation (CSX - Free Report) and United Airlines (UAL - Free Report) reported second-quarter 2022 results. Take a look.
J.B. Hunt reported better-than-expected second-quarter 2022 results, wherein both earnings and revenues outperformed the Zacks Consensus Estimate.
Quarterly earnings of $2.42 per share surpassed the Zacks Consensus Estimate of $1.61 and improved 50.3% year over year. Total operating revenues of $3,837.53 million also outperformed the Zacks Consensus Estimate of $2,908.37 million. The top line jumped 32% year over year on the back of strength in all segments. Total operating revenues, excluding fuel surcharges, rose 21.2% year over year.
Quarterly operating income (on a reported basis) climbed 46.2% to $353.08 million on higher volumes, customer rate and cost-recovery efforts. Operating expenses escalated 30.6% to $3.48 billion.
CSX reported better-than-expected second-quarter 2022 results, wherein both earnings and revenues outperformed the Zacks Consensus Estimate.
Quarterly earnings of 50 cents per share (excluding 4 cents from non-recurring items) beat the Zacks Consensus Estimate of 47 cents and improved 25% year over year.
Total revenues of $3,815 million outperformed the Zacks Consensus Estimate of $3,642.2 million. The top line increased 28% year over year on the back of higher revenues in almost all markets, driven by pricing gains, fuel surcharge and contribution from the acquisition of Quality Carriers. Overall revenues per unit increased 27%.
United Airlines’ second-quarter 2022 earnings (excluding 43 cents from non-recurring items) of $1.43 per share fell short of the Zacks Consensus Estimate of $1.86. Escalated operating expenses induced the earnings miss.
The second quarter of 2022 was the first profitable period at UAL since the onset of the pandemic. Operating revenues at United Airlines came in at $12,112 million, beating the Zacks Consensus Estimate of $12,033.7 million.