JetBlue (JBLU) Q3 earnings exceed estimates on strong traffic growth

JetBlue Airways Corporation (NASDAQ: JBLU) reported stronger than expected earnings for the third quarter of 2019, helped mainly by a marked increase in passenger traffic. The stock gained modestly early Tuesday, soon after the announcement.

Total operating revenues increased 4% annually to $2.09 billion and came in broadly in line with the estimates. Third-quarter revenue per available seat mile (RASM) declined 0.9% from last year. Meanwhile, operating expenses per unit, excluding fuel, increased 0.3%.

Adjusted earnings rose to $0.59 per share during the quarter from $0.42 per share last year. Analysts had forecast a slower growth. Unadjusted profit was $187 million or $0.63 per share, up from $0.50 million or $0.16 per share reported last year.

Revenue passenger miles, a measure of traffic, rose 4.2% to 13.93 billion. On an adjusted basis, pre-tax income jumped 32% year-on-year to $239 million during the three-month period.

Also see: JetBlue Q2 2019 Earnings Conference Call Transcript

“We are just beginning to see the benefits of our revenue, cost, fleet and capital allocation efforts, with additional opportunities ahead of us. Despite some near-term pressures on revenue in our international markets and NEO delays, we believe we are on track to deliver on our goal of $2.50 to 3.00 dollars EPS in 2020,” said CEO Robin Hayes.

The company attributed the positive results to its operational initiatives, which more than offset the impact of hurricane Dorian and disruptions caused by construction activities at the main airports.

For the fourth quarter, the management expects capacity to increase between 4.5% and 6.5% annually. The estimated capacity growth in the whole of 2019 is between 6% and 7%.

Revenue per available seat miles is forecast to decline 3.5%-0.5% in the fourth quarter, when CASM ex-fuel is expected to be down 1% to up 1%. In the whole of 2019, CASM ex-fuel is seen increasing 0.5%-1%.

Related: JetBlue poised to overcome short-term challenges

It has been a roller-coaster ride for JetBlue shares for more than a year. The stock closed the last trading session up 3% and gained further during Tuesday’s premarket session, immediately after the announcement.

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