JetBlue Airways Corporation
), reported earnings of 21 cents per share missing the Zacks
Consensus Estimates by a penny. However, earnings rose
substantially from 14 cents earned in the corresponding quarter a
year ago backed by cost control and increased focus on
differentiated product offerings.
Total operating revenue climbed 10.2% year over year to $1,442
million and surpassed the Zacks Consensus Estimate of $1,439
million. The year-over-year growth was aided by the introduction
of new services, fleet re-designing and expansion of network
Operating income came in at $152 million, up 34.5% year over
year. Operating margin increased 190 basis points (bps) year over
year to 10.5%.
Airline traffic, measured in revenue passenger miles, rose
5.4% year over year in the reported quarter on 5.1% growth in
capacity. Load factor (percentage of seats filled with
passengers) increased 20 bps year over year to 85%.
Yield per passenger mile increased 5.1% year over year in the
third quarter. Passenger revenue per available seat mile grew
5.4% while operating revenue per available seat mile increased 5%
year over year.
In the quarter under review, total operating expenses
increased 8.1% year over year to $1,290 million, primarily due to
maintenance expenses (up 28.0%), and fuel costs and related taxes
(up 4.2%). JetBlue's operating unit cost or cost per available
seat mile (CASM) increased 2.8% year over year. Excluding fuel,
CASM crept up 4.9% from the year-ago quarter.
JetBlue ended the quarter with unrestricted cash and
short-term investments of $954.0 million. The company has a
revolving credit facility of $350 million. Total debt, as of Sep
30, 2013, was $2.84 billion compared with $2.85 billion at the
end of 2012.
For the fourth quarter of 2013, the company expects CASM
between negative 1.0% and positive 1.0% and CASM, excluding fuel
and profit sharing, is expected between negative 0.5% and
positive 1.5% year over year. CASM for full-year 2013 is expected
to increase 1.0%-3%. Excluding fuel and profit sharing, CASM is
estimated to increase between 2.5% and 4.5% year over year.
Capacity is expected to increase 7.0-9.0% in the fourth
quarter and 5.5-7.5% for 2013. JetBlue expects average fuel price
per gallon, including hedges and fuel taxes, at $3.03 in the
fourth quarter and has hedged approximately 39% of its projected
JetBlue, which operates with other carriers like
Delta Air Lines
Southwest Airlines Co.
United Continental Holdings Inc.
), currently carries a Zacks Rank #2 (Buy). We believe the
company displays a strong brand name and is in constant endeavors
to improve its service and products offerings. Additionally,
JetBlue will benefit from growing travel demand, network
expansion, fleet re-designing, cost-saving moves and lucrative
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