Why JetBlue Airways Shares Are Falling Today

JetBlue Airways Corp JBLU reported second-quarter FY23 operating revenue growth of 6.7% year-on-year to $2.61 billion, in line with the consensus estimate.

Adjusted EPS was $0.45, above the consensus of $0.40.

Operating expenses declined 7.2% year-over-year to $2.38 billion.

The operating income for the quarter was $235 million compared to an operating loss of $(113) million last year. The operating margin was 9%.

The load factor improved from 85.1% a year ago to 85.38%. Revenue passenger miles increased by 5.9% Y/Y, and ASM increased by 5.8% Y/Y. CASM ex-fuel increased by 3.2% Y/Y.

The average aircraft fuel price per gallon, including related taxes, was $2.63 vs. $4.24 last year.

The company's adjusted debt was $3.92 billion as of June 30, 2023. The adjusted debt-to-capitalization ratio was 52%.

JetBlue ended the quarter with $1.8 billion in cash and equivalents.

"Overall leisure demand trends are healthy and we continue to see robust demand during peak periods, led by strength in Latin America, visiting-friends-and-relatives and transatlantic travel," commented Joanna Geraghty, JetBlue's president and chief operating officer.

"Looking ahead, we are updating our full-year earnings outlook to reflect near-term headwinds related to the termination of the NEA, a challenging operating environment in the northeast and a greater than expected shift of pent-up COVID demand to long-haul international markets which is pressuring demand for domestic travel during the peak summer travel period. While we remain on track to deliver a profitable year and record revenue performance, we are taking action, including redeploying capacity to mitigate these current challenges and improve margins," added Geraghty.

Related: American, JetBlue Begin Steps To Cease The Northeast Alliance

Q3 Outlook: JBLU now expects 3Q23 revenue to decline (8.0%) - (4.0%) and Adjusted EPS of $(0.20)-$0.00 versus $0.40 estimate.

It sees ASMs increasing by 5.5% - 8.5% and CASM ex-Fuel increasing by 2.5% - 5.5%.

FY23 Outlook: JBLU expects FY23 revenue growth of 6% - 9%. It sees adjusted EPS of $0.05-$0.40 (prior $0.70 - $1.00) vs. $0.78 estimate.

JBLU expects ASMs to increase by 5.5%-8.5% and CASM ex-fuel by 1.5%-4.5%.

Price Action: JBLU shares are trading lower by 8.3% at $7.13 on the last check Tuesday.

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