JetBlue Q4 Earnings Fall Short On Hurricane Related Impacts
As expected, JetBlue Corporation (NASDAQ:JBLU) reported a rather mixed earnings this time around. The company’s earnings were hurt significantly as it suffered the effects of cutting capacity in hurricane-hit Puerto Rico, one of its biggest international markets. The company was forced to cut capacity by about 33% in the region as leisure travel, understandably, dropped. That said, revenues came in about 7% higher than in the same period last year at $1.76 billion. Additionally, despite the rapid fall in earnings, the company managed to post better reported figures than projected earlier. Also, the pre-tax margin, while significantly lower than Q4 2016, still came in ahead of the airline industry average.
- The most important news coming out of the quarter is the fact that the company is recovering well from Hurricane Irma. While Hurricane Maria, as mentioned previously, forced capacity cuts in Puerto Rico, Hurricane Irma failed to leave much of a lingering impact on demand in Florida. That said, both storms reduced JetBlue’s pre-tax margin and EPS by 2.2% and $0.09 in Q4, respectively. This means that the storms caused about half of the company’s year over year decline in EPS.
- That said, demand in Puerto Rico is recovering at a much quicker pace than earlier expected. Additionally, pricing and demand continue to improve in the domestic sector. Total revenue per available seat mile (or TRASM) rose by about 1.8%, in contrast to the initial forecast of 0-3% decline.
- Gaining Over 20% This Year, What Lies Ahead For JetBlue Stock Following Q1 Results?
- Should You Pick JetBlue Stock At $6 After Q4 Beat?
- What’s Next For JetBlue Stock After A 35% Fall This Year?
- Here’s What To Expect From JetBlue’s Q2
- Will JetBlue Stock Recover To Its Pre-Inflation Shock Highs?
- What Led To A 62% Fall In JetBlue Stock Since 2019?
- The company failed to impress in terms of its cost performance this time around. Cost ex-fuel rose by a significant 8.1% year over year. However, this was mostly the result of hurricane-related operational disruption and the company’s decision to give its employees a year-end bonus, following suit in its competitors footsteps, to celebrate the tax cut.
- Going forward, the company expects to see RASM increase in the range of about 2.5% to 5.5% in Q1, while costs ex-fuel come in around 2-4%, with a 28% surge in fuel cost.
- Thanks to the tax cut, earnings for the full year in 2018 will benefit from a near 20% tailwind, helping EPS grow again in the future.
View Interactive Institutional Research (Powered by Trefis):
Global Large Cap | U.S. Mid & Small Cap | European Large & Mid Cap