JetBlue Q4 Earnings: Mixed Results

Mid cap airlines stock JetBlue Airways Corporation (NASDAQ: JBLU) reported Q4 2017 earnings before the market opened this morningwith the top line beating expectations, the the bottom line fell short. Q4 operating revenueswere $1.756 billion versus $1.641 billion as revenue passenger miles increased 3.1% to 11.5 billion on a capacity increase of 5.1%, resulting in a fourth quarter load factor of 83.1%, a 1.6 point decrease year over year. Yield per passenger mile was up 2.8% to 13.57 cents. For Q42017, JetBlue had hedges in place for approximately 10% of its fuel consumption with arealized fuel price of$1.89 per gallon for a 21.6% increase versus fourth quarter 2016 realized fuel price of $1.56. The earnings release noted:

JetBlue does not presently have any forward fuel derivative contracts to hedge its fuel consumption. Based on the fuel curve as of January 12th, JetBlue expects an average price per gallon of fuel of $2.16 in the first quarter of 2018, an increase of approximately 28% over the realized fuel price in the first quarter of 2017.

Net income was $672 million versus $172 million. Full year revenues increased 5.8% to $7.015 billionand net income of$1.147billion versus$759 million.

The CEO commented:

Id like to thank our 21,000 Crewmembers, who rose to each and every challenge during 2017. Our fourth quarter results were driven by solid demand across our network, our successful ancillary platform and recovery in the Caribbean that exceeded our expectations, following a historic hurricane season. We continue to make progress to achieve our margin commitments and to compete successfully as a low-cost carrier.

The CFO added:

In the fourth quarter and 2017 we took actions to navigate a complex external environment, while striving to protect and enhance our margins. These actions included capacity adjustments and redeployments following a challenging summer and to mitigate the impact of hurricanes. We continue to demonstrate our ability to make progress in our commitments to all our stakeholders and to lay the foundation that will ultimately achieve superior margins.

A technical chart for JetBlue Airways Corporation shows a big autumn dip with shares now hovering just below a key resistance level:

A long term performance chart shows JetBlue Airways Corporation giving a good performance thats still not as good as that of large cap Southwest Airlines Co (NYSE: LUV) while the performance ofAlaska Air Group, Inc (NYSE: ALK), which has acquired Virgin America Inc (NASDAQ: VA), seems to have slipped recently:

Finally, here is a quick recap of mid cap JetBlue Airways Corporations recent earnings history along with EPS estimate trends from the Yahoo! Finance analyst estimates page going into the current earnings report:

Earnings History12/30/20163/30/20176/29/20179/29/2017
EPS Est. 0.49 0.23 0.57 0.53
EPS Actual 0.5 0.25 0.64 0.55
Difference 0.01 0.02 0.07 0.02
Surprise % 2.00% 8.70% 12.30% 3.80%
EPS TrendCurrent Qtr. (Dec 2017)Next Qtr. (Mar 2018)Current Year (2017)Next Year (2018)
Current Estimate 0.34 0.24 1.79 1.98
7 Days Ago 0.33 0.24 1.78 1.97
30 Days Ago 0.33 0.25 1.77 1.89
60 Days Ago 0.3 0.28 1.75 1.87
90 Days Ago 0.3 0.28 1.75 1.91