JetBlue Airways Shares Witness Over 10% Drop On Disappointing Annual Outlook

JetBlue Airways Corporation JBLU stock tumbled on Tuesday after the company announced a gloomy outlook.

The air carrier reported a first-quarter adjusted EPS loss of 43 cents. It beat the consensus loss of 52 cents, up from a loss of 34 cents a year ago.

The company reported sales of $2.21 billion, down 5% Y/Y, almost in line with the consensus of $2.205 billion. The first quarter of 2024 saw a 2.7% Y/Y decrease in capacity.

Operating expenses for the quarter increased by 14% to $2.9 billion, with operating expenses per available seat mile (CASM) rising by 17.1%.

Adjusted operating expenses decreased by 3.7% to $2.4 billion. Operating expenses per available seat mile, excluding fuel and other non-airline operating expenses, increased by 7.1% year-over-year.

Earlier this year, JetBlue announced the termination of a deal Monday to acquire Spirit Airlines Inc. SAVE for $3.8 billion, following a decisive legal blockade by the Department of Justice.

“As we look ahead in 2024, we are seeing positive momentum in our revenue growth. Demand during peak periods remains strong, and we continue to manage our capacity during off-peak periods to reflect evolving demand trends. We plan to continue to refine our network and product offering to better serve our leisure customers while diversifying revenues with margin-accretive initiatives,” said Joanna Geraghty, JetBlue’s president and chief operating officer.

Guidance: JetBlue said second-quarter revenue would drop as much as 10.5% in the second quarter of 2024. The carrier forecasts full-year 2024 sales would drop in the low single digits after estimating flat sales for the year in its fourth-quarter earnings release.

The Long Island City, New York-based company estimates the second quarter available Seat Miles to fall between (5.0%) – (2.0%) Y/Y and down low single digits for 2024.

Price Action: JBLU shares are down 11.5% at $6.64 at the last check Tuesday.

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