The discounted U.S. airline JetBlue Airways
Corporation ( JBLU ) delivered weak
first quarter 2013 results on the aftereffects of the Hurricane
Sandy along with high expenses associated with aircraft maintenance
and salaries and wages.DELTA AIR LINES (DAL): Free Stock Analysis
ReportJETBLUE AIRWAYS (JBLU): Free Stock Analysis
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The company's earnings of 5 cents were substantially below both
the prior-year quarter's results and the Zacks Consensus Estimate
of 9 cents.
Total operating revenue climbed 8.0% year over year to $1.29
billion, surpassing the Zacks Consensus Estimate of $1.28 billion.
Expansion of network along with the offering of superior and
advance products and services aided the outperformance.
Operating income came in at $59 million, down by 33.4% year over
year. Operating margin decreased 290 bps year over year to
Airline traffic, measured in revenue passenger miles, jumped 7.6%
year over year in the reported quarter on 6.3% growth in capacity.
Load factor (percentage of seats filled with passengers) increased
100 basis points (bps) year over year to 83.9%.
Yield per passenger mile inched up 0.7% year over year in the
first quarter. Passenger revenue per available seat mile inched up
1.8% while operating revenue per available seat mile improved
In the quarter under review, total operating expenses increased
11.3% year over year to $1.24 billion, primarily due to maintenance
expenses (up 29.8%), other operating expenses (up 20.7%) plus fuel
costs and related taxes (up 8.0%). JetBlue's operating unit cost or
cost per available seat mile (CASM) was up 4.6% year over year.
Excluding fuel, CASM increased 6.6% from the year-ago
JetBlue ended the quarter with unrestricted cash and short-term
investments of $849.0 million. The company has a revolving credit
facility of $350 million. Total debt, as of Mar 31, 2013, was $2.82
billion as compared with $2.85 billion at the end of 2012.
For the second quarter of 2013, the company expects CASM between
negative 1.5% and positive 0.5% and CASM, excluding fuel, between
3.0% and 5.0%. CASM for full year 2013 is expected to increase
1.5-3.5%. Excluding fuel, CASM is expected to increase 2-4%.
Capacity is expected to increase 6.5-8.5% in the second quarter
and 6.0-8.0% for 2013. JetBlue expects average fuel price per
gallon, including hedges and fuel taxes, at $3.03 in the second
quarter of 2013 and has hedged approximately 37% of its projected
Other Airline Stocks
Delta Air Lines ( DAL ) reported first
quarter 2013 results with adjusted earnings of 10 cents per share,
surpassing the Zacks Consensus Estimate of 7 cents. The results
also improved considerably from the year-ago adjusted loss of 5
cents per share.
Southwest Airlines Co. ( LUV ) reported first
quarter 2013 adjusted earnings of 7 cents per share, which beat the
Zacks Consensus Estimate of 3 cents. The results improved
considerably from the prior-year quarter loss of 2 cents per
United Continental Holdings Inc. ( UAL ) posted loss of 98
cents per share, narrower than the Zacks Consensus forecasted loss
of $1.09. Comparing year over year, the result was worse than a
loss of 87 cents per share.
JetBlue currently carries a Zacks Rank #2 (Buy). We believe
JetBlue's favorable business model, cost-saving steps, expansion
initiatives and beneficial partnerships will enable it to generate
earnings growth in the coming months. Additionally, growing travel
demand, network and fleet restructuring, premium on-board services
along with attractive entertainment options and foray into new
locations are expected to boost the company's performance.