The discounted U.S. airline
JetBlue Airways Corporation
) reported its fourth-quarter 2013 adjusted earnings of 14 cents,
beating the Zacks Consensus Estimate by a penny and coming ahead
of the break-even results in the year-ago quarter.
Earnings for the full year of 2013 increased to 52 cents from
40 cents in the year-ago period and also surpassed the Zacks
Consensus Estimate by a penny. Maintenance of a competitive cost
structure and focus on profitable opportunities facilitated the
strong earnings performance.
Total operating revenue climbed 14.4% year over year to $1.36
billion, ahead of the Zacks Consensus Estimate of $1.34 billion.
For 2013, total operating revenue increased 9.2% year over year
to $5.44 billion.
Airline traffic, measured in revenue passenger miles,
increased 7.1% year over year in the reported quarter owing to
8.3% growth in capacity. Load factor (percentage of seats filled
with passengers) decreased 100 basis points (bps) year over year
For 2013, airline traffic increased 6.8% year over year driven
by a 6.9% upside in capacity. Load factor (percentage of seats
filled with passengers) declined 10 bps year over year to
Yield per passenger mile moved up 6.5% year over year in the
fourth quarter. Passenger revenue per available seat mile moved
up 5.3% while operating revenue per available seat mile increased
5.6% in the reported quarter.
For the full year of 2013, Yield per passenger mile edged up
2.4% year over year. Passenger revenue per available seat mile
and operating revenue per available seat mile registered 2.3% and
2.2% year-over-year growth, respectively.
Impressive revenue performance in some of its key markets like
New York, Fort Lauderdale, the Caribbean and Latin America aided
the solid results.
Operating Income and Expenses
In the quarter under review, total operating expenses rose
8.7% year over year to $1.25 billion, primarily due to
maintenance expenses (up 23.3%), Depreciation and amortization
(up 13.7%), Sales and marketing (up 14.3%) and Salaries and wages
(up 11.9%). JetBlue's operating unit cost or cost per available
seat mile (CASM) grew 0.4% year over year while excluding fuel
and profit sharing, CASM increased 0.6% from the year-ago
In 2013, total operating expenses were $5.03 billion, up 8.8%
year over year. Maintenance expenses and depreciation
increased 28.0% and 12.5%, respectively. JetBlue's CASM climbed
1.9% year over year. However, excluding fuel and profit sharing,
CASM inched up 3.8% year over year.
Operating income came in at $115 million, up significantly by
161.4% year over year. Operating margin increased 470 bps year
over year to 8.4%.
For the full year of 2013, operating income increased 13.8%
year over year to $428 million. Operating margin inched up 40 bps
year over year to 7.9%.
JetBlue ended the year with unrestricted cash and short-term
investments of $627.0 million. Total debt at the end of 2013 was
$2,585 million compared with $2,851 million at the end of
JetBlue expects poor weather conditions in the Northeast
during early January to reduce its first quarter 2014 revenue by
an estimated $45 million and operating income by an approximate
amount of $30.0 million.
For the first quarter of 2014, the company expects CASM to
increase 0-2% and CASM, excluding fuel and profit sharing, to
range between 3.0-5.0%.
CASM for full-year 2014 is expected to increase 1.0-3.0%.
Excluding fuel and profit sharing, CASM is expected to increase
in the range of 3.0-5.0%.
Capacity is expected to increase in the range of 2.5-4.5% in
the first quarter and for 2014 it is expected to increase in the
range of 5.0-7.0%.
JetBlue expects average fuel price per gallon, including
hedges and fuel taxes, to be $3.13 in the first quarter of 2014.
The company has hedged approximately 24% of its projected fuel
requirements for the first quarter of 2014.
Other stocks to consider in the aviation service industry are
Delta Air Lines Inc.
United Continental Holdings Inc.
Southwest Airlines Co.
). Delta's earnings of 65 cents were ahead of the Zacks Consensus
Estimate of 63 cents while United Continental posted a profit of
78 cents, comfortably beating the Zacks Consensus Estimate of 68
cents. Southwest's net earnings of 33 cents also managed to beat
the Zacks Consensus Estimate of 28 cents in the most recent
We believe JetBlue will continue to benefit from increasing
travel demand, network expansion, fleet re-designing,
optimization of unit revenues, capital expenditure management and
disciplined growth. Additionally, ancillary revenue initiatives
enhanced by its Getaway Vacations Division along with growing
presence in key markets and penetration into untapped arenas will
support its momentum.
JetBlue currently carries a Zacks Rank #2 (Buy).
DELTA AIR LINES (DAL): Free Stock Analysis
JETBLUE AIRWAYS (JBLU): Free Stock Analysis
SOUTHWEST AIR (LUV): Free Stock Analysis
UNITED CONT HLD (UAL): Free Stock Analysis
To read this article on Zacks.com click here.