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JetBlue Improves Revenue Guidance on Buoyant Air-Travel Demand
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Shares of JetBlue Airways Corporation (JBLU - Free Report) performed well on the bourse on Dec. 4, 2024, closing the trading session at $6.56 per share, up 8.25% from the previous day's closing. The upside was owing to the improved guidance revealed by the company.
JBLU now anticipates its fourth-quarter revenues to decline in the range of 2-5% on a year-over-year basis. This marks an improvement from the previous guidance of a 3%-7% decline. For 2024, total revenues are forecasted to tumble in the range of 3.5-4.5% (prior view: down 4-5%).
The upside in revenue performance was owing to better-than-expected booking performance for traveling in November and December post the U.S. presidential election. The fourth-quarter revenue headwind from the election is now expected to be 0.5 points compared with the prior forecast of 1.0 points.
Additionally, improved close-in demand and solid operational performance over Thanksgiving week led to better revenues during the November holiday peak. JBLU witnessed December bookings surpass prior expectations in peak and off-peak travel periods.
For fourth-quarter 2024, capacity (measured in available seat miles) is now anticipated to decline in the 4.5-6.5% band (prior view: down 4-7%). For 2024, capacity is now envisioned to be down in the 3-4% range (prior view: down 2.5-4.5%).
JBLU’s 2024 revenue initiatives are anticipated to surpass $300 million of cumulative benefit in the fourth quarter, backed by preferred seating, the Blue Basic carry-on baggage policy change, and other initiatives. The execution of JetForward strategy also acted as a tailwind for JBLU’s positive outlook.
Declining expenses (owing to the moderating fuel prices since the start of the fourth quarter) marks another major positive. JetBlue now anticipates fourth-quarter 2024 average fuel cost per gallon in the range of $2.40-$2.50 (prior view: $2.50-$2.65). For 2024, JBLU now anticipates average fuel cost per gallon in the range of $2.73-$2.76 (prior view: $2.75 - $2.80). Lower fuel costs should boost the company’s bottom line, as fuel expenses represent a key input cost for any transportation player.
Non-fuel unit costs benefited from cost-cutting efforts and operational reliability. As a result, the company has lowered its consolidated operating costs per available seat mile (excluding fuel and special items) guidance. JBLU now anticipates fourth-quarter 2024 CASM, excluding fuel and special items, to increase 12.5-14.5%, down from the prior expectation of a 13-15% increase. For 2024, CASM, excluding fuel and special items, is predicted to increase in the 7-7.5% range (prior view: up 7-8%).
Interest expense is expected to be between $145 million and $155 million (prior view: $155-$165 million) for the fourth quarter. For 2024, interest expense is expected between $360 million and $370 million (prior view: $370-$380 million).
Capital expenditures are still expected to be roughly $450 million for the fourth quarter and $1.6 billion for the full year.
EXPD has an impressive earnings surprise history. The company's earnings outpaced the Zacks Consensus Estimate in two of the trailing four quarters (missed the mark in the remaining quarter and met in the other quarter), delivering an average surprise of 4.75%.
The Zacks Consensus Estimate for EXPD’s 2024 earnings has been revised 6.4% upward over the past 90 days. EXPD has an expected earnings growth rate of 8.38% for 2024. Shares of EXPD have lost 4.5% so far this year.
WAB has an impressive earnings surprise history. The company's earnings outpaced the Zacks Consensus Estimate in three of the trailing four quarters (missed the mark in the remaining quarter), delivering an average surprise of 9.46%.
The Zacks Consensus Estimate for WAB’s 2024 earnings has been revised 2.5% upward over the past 90 days. WAB has an expected earnings growth rate of 28.55% for 2024. Shares of WAB have gained 57.4% so far this year.
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JetBlue Improves Revenue Guidance on Buoyant Air-Travel Demand
Shares of JetBlue Airways Corporation (JBLU - Free Report) performed well on the bourse on Dec. 4, 2024, closing the trading session at $6.56 per share, up 8.25% from the previous day's closing. The upside was owing to the improved guidance revealed by the company.
JBLU now anticipates its fourth-quarter revenues to decline in the range of 2-5% on a year-over-year basis. This marks an improvement from the previous guidance of a 3%-7% decline. For 2024, total revenues are forecasted to tumble in the range of 3.5-4.5% (prior view: down 4-5%).
The upside in revenue performance was owing to better-than-expected booking performance for traveling in November and December post the U.S. presidential election. The fourth-quarter revenue headwind from the election is now expected to be 0.5 points compared with the prior forecast of 1.0 points.
Additionally, improved close-in demand and solid operational performance over Thanksgiving week led to better revenues during the November holiday peak. JBLU witnessed December bookings surpass prior expectations in peak and off-peak travel periods.
For fourth-quarter 2024, capacity (measured in available seat miles) is now anticipated to decline in the 4.5-6.5% band (prior view: down 4-7%). For 2024, capacity is now envisioned to be down in the 3-4% range (prior view: down 2.5-4.5%).
JBLU’s 2024 revenue initiatives are anticipated to surpass $300 million of cumulative benefit in the fourth quarter, backed by preferred seating, the Blue Basic carry-on baggage policy change, and other initiatives. The execution of JetForward strategy also acted as a tailwind for JBLU’s positive outlook.
Declining expenses (owing to the moderating fuel prices since the start of the fourth quarter) marks another major positive. JetBlue now anticipates fourth-quarter 2024 average fuel cost per gallon in the range of $2.40-$2.50 (prior view: $2.50-$2.65). For 2024, JBLU now anticipates average fuel cost per gallon in the range of $2.73-$2.76 (prior view: $2.75 - $2.80). Lower fuel costs should boost the company’s bottom line, as fuel expenses represent a key input cost for any transportation player.
Non-fuel unit costs benefited from cost-cutting efforts and operational reliability. As a result, the company has lowered its consolidated operating costs per available seat mile (excluding fuel and special items) guidance. JBLU now anticipates fourth-quarter 2024 CASM, excluding fuel and special items, to increase 12.5-14.5%, down from the prior expectation of a 13-15% increase. For 2024, CASM, excluding fuel and special items, is predicted to increase in the 7-7.5% range (prior view: up 7-8%).
Interest expense is expected to be between $145 million and $155 million (prior view: $155-$165 million) for the fourth quarter. For 2024, interest expense is expected between $360 million and $370 million (prior view: $370-$380 million).
Capital expenditures are still expected to be roughly $450 million for the fourth quarter and $1.6 billion for the full year.
JBLU’s Zacks Rank
JBLU currently carries a Zacks Rank #3 (Hold).
Stocks to Consider
Some better-ranked stocks from the Zacks Transportation sector are Expeditors International of Washington, Inc. (EXPD - Free Report) ) and Wabtec Corporation (WAB - Free Report) . Each stock presently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
EXPD has an impressive earnings surprise history. The company's earnings outpaced the Zacks Consensus Estimate in two of the trailing four quarters (missed the mark in the remaining quarter and met in the other quarter), delivering an average surprise of 4.75%.
The Zacks Consensus Estimate for EXPD’s 2024 earnings has been revised 6.4% upward over the past 90 days. EXPD has an expected earnings growth rate of 8.38% for 2024. Shares of EXPD have lost 4.5% so far this year.
WAB has an impressive earnings surprise history. The company's earnings outpaced the Zacks Consensus Estimate in three of the trailing four quarters (missed the mark in the remaining quarter), delivering an average surprise of 9.46%.
The Zacks Consensus Estimate for WAB’s 2024 earnings has been revised 2.5% upward over the past 90 days. WAB has an expected earnings growth rate of 28.55% for 2024. Shares of WAB have gained 57.4% so far this year.