JetBlue Posts A Strong Fourth Quarter

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JetBlue Airways

JetBlue (NASDAQ:JBLU) saw a substantial rise in revenue in the fourth quarter, this mainly on the back of the strategy outlined by management, to improve the airline’s operation. Revenues for the quarter rose by as much as 11.9% year on year, with earnings coming in at $0.50 per share for the quarter, 56% above last year’s earnings, where JetBlue posted $.32 per share for the fourth quarter. JetBlue’s Fourth quarter results re-iterate that the company’s strategy to improve the airline’s financials is bearing fruit.

We currently have a price estimate of $20 per share, which is higher than the market price. You can use our interactive dashboard JetBlue Q4 Results to modify key drivers and visualize the impact on JetBlue’s price estimate.

 

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Key Takeaways for the Quarter:

*JetBlue posted a pre-tax GAAP net income of $200 million, this is 20% above last year’s results.

*Revenue Per Available Seat Mile (RASM) increased by 2.4% year on year, a result that was to be expected, with improved traffic flows seen right throughout the quarter for the airline industry.

*Operating expenses fell for the quarter, with Cost Per Available Seat Mile (ex-fuel), declining by 3.6%. This is mostly as a result of JetBlue taking key steps to improve its operations, removing inefficient routes, and improving on ground logistics.

JetBlue going into 2019 expects to introduce a set of new aircraft to its fleet, as it looks to expand capacity by 5-7%, for the year, and up to 9% for the first quarter. JetBlue’s management has outlined a series of policies that will ensure that it efficiently rolls out new capacity, through a mix of new routes, and increases availability of flights on existing routes.

Management’s policies to run an efficient operation, expand value added services like its premium class Mint program, and incrementally increase available seat miles, bodes well and should translate into the airline’s earnings improving throughout 2019. This should translate into improved stock performance, and  should see JetBlue’s stock come off its recent lows.

 

 

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