JetBlue misses first quarter profit estimates on fuel costs

Investing.com - JetBlue Airways Corp (NASDAQ: JBLU) reported a first quarter loss of -$0.87 per share on Tuesday, missing analyst estimates of -$0.72 by $0.15. Revenue reached $2.24 billion, matching analyst expectations and representing a 4.7% increase from the prior year period.

The airline’s revenue per available seat mile (RASM) grew 6.5% YoY, driven by resilient demand and strong execution. However, elevated fuel costs pressured results, with average fuel prices rising 15.2% YoY to $2.96 per gallon.

Operating expenses per available seat mile increased 8.3% YoY, while adjusted operating expenses per available seat mile rose 6.6% YoY, including approximately four points of pressure from operational disruptions.

"We delivered a strong first quarter, with revenue performance exceeding our expectations, driven by resilient consumer demand and an appreciation for JetBlue’s industry-leading customer offering," said Joanna Geraghty, chief executive officer.

"While the macro environment, particularly fuel, has become more volatile, we are taking decisive actions to manage what is within our control, including adjusting capacity, optimizing revenue, and maintaining disciplined cost control."

For the second quarter, JetBlue expects capacity growth of 1.5% to 4.5% and RASM growth of 7.0% to 11.0%. The midpoint of the RASM guidance suggests approximately 9% growth. The company anticipates fuel prices of $4.13 to $4.28 per gallon and adjusted operating expenses per available seat mile to increase 3.0% to 5.0% YoY.

To mitigate elevated fuel costs, JetBlue reduced second quarter capacity by nearly one point and plans to reduce second half capacity by at least two to three points versus prior expectations. The company expects 30% to 40% fuel recapture in the second quarter and 100% by early 2027.

JetBlue ended the quarter with $2.4 billion in liquidity and executed $500 million of aircraft-backed financing. The airline’s Fort Lauderdale hub continued to exceed expectations, with RASM up 5% YoY on 23% capacity growth.

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