The discounted U.S. airline
JetBlue Airways Corporation
) delivered a break even fourth quarter 2012 adjusted earnings,
missing the Zacks Consensus Estimate of 2 cents as well as the
year-ago earnings of 8 cents per share.
Earnings for the full year of 2012 increased to 40 cents from 28
cents in the year-ago period but missed the Zacks Consensus
Estimate by a penny.
Although Hurricane Sandy negatively impacted the fourth quarter
results, the company registered a strong performance in 2012. The
low-cost airline positioned itself as New York's favorite airline
company and its expansion in Caribbean and Latin American markets
is yielding record revenue growth for the company.
Total operating revenue climbed 4.2% year over year to $1.19
billion, missing the Zacks Consensus Estimate of $1.22 billion.
For 2012, total operating revenue increased 10.6% year over year
to $4.98 billion.
Airline traffic, measured in revenue passenger miles, increased
4.3% year over year in the reported quarter on 4.8% growth in
capacity. Load factor (percentage of seats filled with
passengers) decreased 30 basis points (bps) year over year to
For 2012, airline traffic increased 9.3% year over year on a 7.6%
upside in capacity. Load factor (percentage of seats filled with
passengers) enhanced 140 bps year over year to 83.8%.
Yield per passenger mile inched up 0.2% year over year in the
fourth quarter. Passenger revenue per available seat mile inched
down 0.2% while operating revenue per available seat mile
decreased 0.5% in the reported quarter.
For the full year of 2012, Yield per passenger mile edged up 2%
year over year. Passenger revenue per available seat mile and
operating revenue per available seat mile registered 3.6% and
2.8% year-over-year growth, respectively.
Highlights of the release
In the quarter under review, total operating expenses rose 8.3%
year over year to $1.15 billion, primarily due to maintenance
expenses (up 27.3%), other operating expenses (up 11.8%) and
landing fees (up 9.9%). JetBlue's operating unit cost or cost per
available seat mile (CASM) grew 3.3% year over year. Excluding
fuel, CASM increased 4.8% from the year-ago quarter.
In 2012, total operating expenses were $4.61 billion, up 10.1%
year over year. Maintenance and Landing fees increased
48.4% and 12.8%, respectively. JetBlue's CASM climbed 2.3% year
over year. However, excluding fuel, CASM inched up 3.3% year over
Operating income came in at $44 million, down by a significant
47.5% year over year. Operating margin decreased 360 bps year
over year to 3.7%.
For the full year of 2012, operating income increased 16.6% year
over year to $376 million. Operating margin inched up 40
bps year over year to 7.5%.
JetBlue ended the year with unrestricted cash and short-term
investments of $731.0 million. Total debt at the end of 2012 was
$2,851 million as compared to $3,136 million at the end of 2011.
For the first quarter of 2013, the company expects CASM to
increase 1-3% and CASM, excluding fuel, to range between negative
2.0% to positive 4.0%.
CASM for full year 2013 is expected to increase 1.5-3.5%.
Excluding fuel, CASM is expected to increase in the range of
1-3%, mostly due to increase in maintenance costs.
Capacity is expected to increase in the range of 5.5-7.5% in the
first quarter and for 2013.
JetBlue expects average fuel price per gallon, including hedges
and fuel taxes, to be $3.23 in the first quarter of 2013. The
company has hedged approximately 18% of its projected fuel
requirements for the first quarter of 2013.
Other Airline Releases
Other stocks to consider in the aviation service industry are
Delta Air Lines
United Continental Holdings Inc.
Southwest Airlines Co.
). Southwest's Net earnings of 9 cents managed to beat the Zacks
Consensus Estimate of 7 cents in the most recent quarter, while
Delta's earnings of 28 cents were in line with the Zacks
Consensus Estimate. Meanwhile, United Continental posted dismal
fourth-quarter 2012 results, with a loss of 58 cents wider than
the Zacks Consensus Estimate of a loss of 54 cents.
We believe JetBlue will continue to benefit from network
expansion, significant cost control measures, deployment of fuel
efficient fleet and managed capital expenditures. Additionally,
ancillary revenue initiatives enhanced by its Getaway Vacations
Division and even more space offering along with airline
partnerships will likely boost its top-line growth.
JetBlue currently carries a Zacks Rank #3 (Hold).
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
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