JetBlue (JBLU) Q3 2019 earnings preview: What’s in store?

After reporting impressive results for the second quarter a few months ago, JetBlue Airways (NASDAQ: JBLU) is preparing to release its September-quarter earnings Tuesday before the opening bell. Analysts are of the view that the results will benefit from the stable demand for travel, and forecast a 21% growth in earnings to $0.52 per share. The strong passenger traffic is expected to have pushed up revenues to $2.07 billion from last year’s $2.01 billion.

The New York-based aviation firm has been doing better than some of its rivals this year, mainly because it does not operate Boeing 737 Max planes, which were grounded recently over safety concerns. It assumes significance at a time when the uncertainty surrounding the revival of the grounded Boeing fleet remains a major concern for the industry.

Earlier, the management had predicted that third-quarter results would benefit from the decline in oil prices and improvement in unit revenues compared to last year. However, more recent estimates indicate that revenue growth was negatively impacted by unfavorable weather conditions.

Beyond 2019

In the longer term, the overall performance might get affected by the extended delay in the delivery of Airbus A321neo aircraft, putting unit costs under pressure, though the arrival of the first A321neo last month brought some relief. Meanwhile, recent reports indicate that traffic to Puerto Rico, where JetBlue witnessed a drop in demand, is picking up.

Related: JetBlue Airways Q2 2019 Earnings Call Transcript

Analysts’ consensus hold rating on the stock, after multiple upgrades, makes it an investment option worth considering, though there are concerns about the challenges facing the airline industry in general, such as hurricane-related disruptions and uncertainties in the global economy.

Q2 Results

In the June-quarter, a 9% revenue growth lifted JetBlue’s earnings, excluding one-off items, to $0.60 per share, representing a 62% year-on-year increase. The market reacted positively to the above-consensus results and the stock gained. An increase in cost per available seat miles was more than offset by higher revenue per unit. Lower gasoline prices also contributed to the uptick.

Other Airlines 

Earlier this week, United Airlines (UAL) reported a 33% growth in third-quarter earnings to $4.07 per share as improved passenger traffic pushed up revenues to about $11 billion. American Airlines (AAL) is scheduled to release its September-quarter results on October 31 before the opening bell. The market is looking for earnings of $1.4 per share, up 24% from last year.

Also see: JetBlue poised to overcome short-term challenges

It has been a roller-coaster ride for JetBlue shares since last year. The stock closed the previous trading session 4% above the levels seen a year ago. It rose 3% since the beginning of the year.

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