How Did JetBlue Perform In Q2?

-32.50%
Downside
7.42
Market
5.01
Trefis
JBLU: JetBlue Airways logo
JBLU
JetBlue Airways

As expected, JetBlue Corporation (NASDAQ:JBLU) reported quite a disappointing earnings this time around. That said, earnings suffered greatly at the hands of higher fuel prices and the unfavorable timing of the Easter holidays in the year. Profits in the quarter plunged by more than 50% in comparison to the figure reported in the same period last year. Additionally, unit revenues in the quarter declined by almost 1.2% year over year. This was, again, a result of the adverse timing of the Easter holidays, and a credit card program bonus received in the year-earlier period.

Due to the discouraging earnings, investors were quick to punish the stock price which plunged by almost 10% post the call. However, we believe that this is a rather unfair read of the situation and that the stock is actually now undervalued. In this respect, we have created an interactive dashboard to best elaborate on our valuation method and reasoning. Please click on the link to make changes and arrive at your own price estimate.

Relevant Articles
  1. Should You Pick JetBlue Stock At $6 After Q4 Beat?
  2. What’s Next For JetBlue Stock After A 35% Fall This Year?
  3. Here’s What To Expect From JetBlue’s Q2
  4. Will JetBlue Stock Recover To Its Pre-Inflation Shock Highs?
  5. What Led To A 62% Fall In JetBlue Stock Since 2019?
  6. Forecast Of The Day: JetBlue’s Passenger Yield

As mentioned above, the company’s financial performance in the quarter was hurt on a disadvantageous holiday calendar.  However, that was only part of the reason for the dismal display. Fuel prices jumped by almost 40% year over year this time, weighing on earnings in the quarter, as well. However, management is well aware of the situation and is already implementing strategies to mitigate the impact of higher fuel costs in order to improve margins. In this respect, the company is expected to make a series of adjustments to both capacity and ancillary revenue in the coming months.

That said, management expects things in the second half to improve notably. In this respect, JetBlue expects its non-fuel costs to decline by about 2-4% through Q3 and Q4, as the company benefits from easy comparisons and better cost saving initiatives. Further, RASM is expected to grow solidly through the second half, as well. All these factors should also aid EPS growth, unless of course, fuel costs jump to an unprecedented rate.

What’s behind Trefis? See How it’s Powering New Collaboration and What-Ifs
Like our charts? Explore example interactive dashboards and create your own.