JetBlue cleared for take-off after Q3 beats estimates
By Robert Davis
17:19, 26 October 2021
JetBlue Airways became the latest airline to beat Wall Street expectations, releasing third quarter results that topped revenue and profit estimates.
At press time, shares of JetBlue were trading down 0.44% to $14.68 (£10.66) per share.
Earnings details
According to the New York-based airline’s earnings statement, revenue for the three months ended 30 September came in $1.97bn, pre-tax earnings were $190m and earning per share (EPS) amounted to $0.40 compared to revenue of $492m, a pre-tax loss of $578m and an EPS loss of $1.44 last year.
This revenue total represents a decline of 5.5% since 2019, better than the airline’s anticipated loss of 6%–9% over the same time frame.
Two analysts at MarketBeat estimated JetBlue would post revenue of $1.95bn and an EPS loss of $0.15 in Q3.
Meanwhile, the company has steadily pared back the mountain of debt it assumed during the pandemic. For example, JetBlue was able to reduce its debt-to-capital ratio to 53% in Q3 from 55% in Q2.
The air carrier repaid more than $74m in regularly scheduled debt and prepaid $115m of federal relief loans, and another $105m of bank loans during the third quarter.
The company ended the quarter with approximately $3.3bn in unrestricted cash, excluding JetBlue’s $550m undrawn revolving credit line. Adjusted net debt was $1.12bn.
Robin Hayes, JetBlue’s CEO described the company’s Q3 performance in a press release as one that set it “on a trajectory to restore our earnings power to beyond 2019 levels over the coming years.”
“We believe that demand is once again poised to re-accelerate into the peak holiday periods and beyond as people continue to adjust to a new normal. We are marching towards a full recovery and a return to sustained profitability, with margin as our ‘north star’,” Hayes said.
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Outlook
JetBlue expects its business to pick up after the holiday season as demand for airline travel continues to increase.
Next quarter, the company expects its revenue to decline between 8%–13% while its operational capacity shrinks 4%–7% due to a seasonal pull-back of leisure travel and a delay in the recovery of corporate travel.
JetBlue had 16,168 million available seat miles in Q3, up 134% year over year. The load factor was 79.8% versus 42.6%.
The company also expects its EBITDA to be between a loss of $50m and a gain of $50m. Q3 adjusted EBITDA was $140m, versus $381m in Q3 2019.
Ursula Hurley, JetBlue’s CFO, said several factors could impact the company’s performance next quarter, including “seasonal leisure demand pattern, pressure from the recent material spike in fuel prices, as well as ramp-up related labour costs.”
“We continue to make good progress in returning our balance sheet to investment grade credit metrics. Looking ahead, we plan to maintain a balanced approach to capital allocation to help achieve our financial targets, enabled by our relatively strong balance sheet which we believe ranks among the best in the industry,” Hurley said.
Read more: American Airlines and JetBlue in partnership to boost flying from New York and Boston
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