JetBlue posted a wider third-quarter loss, yet its shares jumped on Tuesday after management pointed to strong demand and a path to profit by 2028. The stock had hit a new low a day earlier amid questions about the airline's long-term health.
Shares were up nearly 19% in early trading Tuesday, a rebound after the stock fell to a new low Monday. The move came as the airline said strong travel demand is helping offset higher fuel prices.
A wider loss driven by fuel
JetBlue posted a net loss of $257 million for the three months ended Sept. 30, compared with a loss of $143 million a year earlier. Its fuel bill rose 61% to $868 million.
The airline's adjusted loss per share of 60 cents was wider than the loss of 55 cents Wall Street expected, according to LSEG estimates. Revenue came in at $2.81 billion against $2.82 billion expected.
Average fares rose more than 19% to $245.11 from $205.67 a year earlier. CEO Joanna Geraghty said in the earnings release: "Resilient demand and strong yields drove revenue well ahead of our initial expectations".
Liquidity and a 2028 target
On the balance sheet, JetBlue ended the quarter with $2.2 billion in liquidity and had total debt of $8.4 billion as of Sept. 30. A group of senior creditors is reportedly working with restructuring adviser PJT Partners, the Wall Street Journal reported Friday.
Still, CFO Ursula Hurley said the company believes it has the liquidity and financing options to bridge to at least $1 EPS and positive free cash flow in 2028. JetBlue last posted an annual profit in 2019.
Fourth-quarter outlook
JetBlue said revenue per available seat mile would be up as much as 22% in the fourth quarter, bringing the annual increase to an expected 13.5% to 14.5%.
The Motley Fool reported that JetBlue president Marty St. George predicts profit margins will expand in Q4 despite fuel prices forecasted to be 85% higher than in the same period last year.
Sources: CNBC, The Motley Fool
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