A month has gone by since the last earnings report for JetBlue Airways (JBLU). Shares have added about 9.7% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is JetBlue due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
JetBlue reported a fourth-quarter 2024 loss (excluding 8 cents from non-recurring items) of 21 cents per share, narrower than the Zacks Consensus Estimate of a loss of 30 cents. Lower operating costs aided the bottom line. In the year-ago quarter, JBLU reported a loss of 19 cents per share.
Operating revenues of $2.28 billion beat the Zacks Consensus Estimate of $2.26 billion but decreased 2.1% year over year. Passenger revenues, accounting for the bulk of the top line (92.1%), declined 3.1% year over year to $2.1 billion. Other revenues rose 11.5% year over year to $177 million.
Revenue per available seat mile (RASM: a key measure of unit revenues) increased 3.2% year over year to 14.11 cents. Passenger revenue per available seat mile grew 2.2% year over year to 13.01 cents. The average fare at JetBlue inched down 0.3% year over year to $211.18. The yield per passenger mile rose 1.9% year over year.
Consolidated traffic (measured in revenue passenger miles) declined 2.6% year over year. Capacity (measured in available seat miles) dropped 5.1% year over year. Consolidated load factor (percentage of seats filled by passengers) improved 2.1 percentage points to 82.2% as the traffic decline was less than the capacity reduction. Our estimate for load factor is pegged at 80.6%.
Total operating costs (on a reported basis) declined 5.5% year over year to $2.26 billion. Expenses on salaries, wages and benefits increased 10.3% year over year. Expenses on aircraft fuel declined 27.3% year over year.
The average fuel price per gallon (including related taxes) was $2.47, down 22.3% year over year. JBLU’s operating expenses per available seat mile (CASM) decreased 0.4% year over year. Excluding fuel, CASM rose 11% to 10.76 cents.
For first-quarter 2025, capacity is anticipated to decline in the 2-5% band. CASM, excluding fuel and special items, is predicted to climb 8-10%. Capital expenditures are expected to be roughly $270 million. RASM is forecasted to either decline 0.5% or increase 3.5% from first-quarter 2024 actuals. The average fuel cost per gallon is estimated to be between $2.65 and $2.8.
For 2025, capacity is envisioned to be flat year over year. CASM, excluding fuel and special items, is predicted to be up in the 5-7% range. RASM is expected to increase in the 3-6% band. Adjusted operating margin is expected in the 0-1% band. Capital expenditures are expected to be roughly $1.4 billion.
In the past month, investors have witnessed a downward trend in fresh estimates.
The consensus estimate has shifted -52.63% due to these changes.
At this time, JetBlue has a poor Growth Score of F, however its Momentum Score is doing a bit better with a D. Charting a somewhat similar path, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, JetBlue has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
JetBlue is part of the Zacks Transportation - Airline industry. Over the past month, Ryanair (RYAAY), a stock from the same industry, has gained 0.9%. The company reported its results for the quarter ended December 2024 more than a month ago.
Ryanair reported revenues of $3.16 billion in the last reported quarter, representing a year-over-year change of +8.6%. EPS of $0.29 for the same period compares with $0.03 a year ago.
For the current quarter, Ryanair is expected to post a loss of $0.64 per share, indicating a change of -23.1% from the year-ago quarter. The Zacks Consensus Estimate remained unchanged over the last 30 days.
Ryanair has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of C.
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This article originally published on Zacks Investment Research (zacks.com).
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