JetBlue Q2 Earnings: Revenue And EPS Beat, Unveils JetForward Strategy, Targets $800M-$900M Incremental EBIT By 2027

JetBlue Airways Corporation JBLU stock gained after the company reported better-than-expected second-quarter 2024 results.

The air carrier reported a second-quarter adjusted EPS of $0.08, above the consensus loss of $0.13, and compared to EPS of $0.45 reported a year ago.

JetBlue reported operating revenue of $2.428 billion, down 6.9% year over year, beating the consensus of $2.397 billion. Second quarter system capacity decreased by 2.7% year over year.

“In the second quarter, we continued to implement our JetForward strategy with the announcement of more significant network changes… As we progress through the second half of the year, we’ll be announcing additional initiatives designed to further enhance our customer value proposition, close the gap in our product offering to our peers, and drive significant financial benefit,” commented Marty St. George, JetBlue’sJetBlue’s president.

The operating margin for the quarter declined 670 bps to 2.3%, and the adjusted operating margin stood at 2.4%, down YoY from 9.9%.

Operating expenses for the quarter declined slightly by 0.1% to $2.37 billion, while the operating expenses per available seat mile (CASM) rose 2.6% YoY.

Adjusted operating expenses rose 0.9% to $1.73 billion. Operating expenses per available seat mile, excluding fuel and other non-airline operating expenses, increased by 3.7% YoY.

JBLU’s Average fuel price in the second quarter was $2.87 per gallon, up from $2.73 a year ago.

The airline ended the quarter with ~$1.6 billion in liquidity, excluding an undrawn $600 million revolving credit facility.

JBLU delivered improved operational performance year-over-year with a completion factor of 98.8%, up from 97.8% YoY.

“While many of these underlying initiatives will take time to ramp to their full potential, with the strong foundation of JetForward, we are poised to generate $800 – $900 million of incremental EBIT from 2025 through 2027 and expect the benefit to be realized evenly over those three years,” said Ursula Hurley, JetBlue’s chief financial officer.

“We are setting ourselves on a path to restore our balance sheet health, and in support of securing our financial future, we are announcing an incremental aircraft deferral of approximately $3 billion of planned capital expenditures. Our focus will be on driving value from our existing asset base and, ultimately, generating positive free cash flow,” Hurley added.

Q3 Guidance: JetBlue anticipates a year-over-year revenue drop of 5.5% to 1.5%; Available Seat Miles (ASMs) are expected to decrease by 6% to 3% YoY.

CASM ex-fuel is projected to rise 6% to 8%, and the expected fuel price per gallon is between $2.82 and $2.97.

2024 Guidance: JetBlue anticipates a year-over-year revenue drop of 6% to 4% (prior view: Down low single digits); Available Seat Miles (ASMs) are expected to decrease by 5% to 2.5% YoY (prior view: Down low single digits).

2024 CASM ex-fuel is expected to increase 6.5% to 8.5%; the projected fuel price per gallon is between $2.80 and $3.00.

Price Action: JBLU shares are trading higher by 4.22% to $6.18 premarket at the last check Tuesday.

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