Will JetBlue Airways Post An Earnings Beat?

JBLU: JetBlue Airways logo
JetBlue Airways

The shares of JetBlue Airways (NASDAQ: JBLU) have lost 25% in value since April as concerns of a fourth coronavirus wave lowered investor confidence in the airline and hotel industries. Despite government aid assisting payroll support during the pandemic, the second quarter earnings are likely to remain negative. Moreover, the revenues are likely to contract by 38% (y-o-y). However, Trefis believes that the recent dip in the stock price is an opportunity for gains given just $683 million operating cash outflow last year. We highlight the quarterly trends in revenues, earnings, stock price, and expectations for Q2 2021 in an interactive dashboard analysis, JetBlue Airways Earnings Preview.

How did JetBlue perform during the first quarter?

In Q1, JetBlue reported a 54% (y-o-y) contraction in net revenues and a 39% (y-o-y) reduction in capacity (available seat miles). The company reported a net loss of $247 million and $177 million of operating cash. Given the suspension of dividends and share buybacks, the operating cash supported $211 million of capital expenses and certain short-term investments. On the operational front, occupancy rate improved by 11-percentage-points (q-o-q) to 64% assisted by rising demand and efficient capacity utilization. Considering the ongoing improvement in passenger figures during the second quarter, the company is expected to post better financial and operational metrics.

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How has JBLU stock fared in comparison to the S&P 500?

JBLU stock declined from levels of around $21 in February 2020 (pre-crisis peak) to levels of around $7 in March 2020 (as the markets bottomed out), implying JBLU stock lost 67% from its approximate pre-crisis peak. With the easing of restriction measures, the stock has almost doubled to $15 and we believe that there is more room for growth. In comparison, the S&P 500 Index first fell 34% as Covid-19 cases accelerated outside China and gained 95% after the Fed’s intervention coupled with ongoing vaccinations.

Do JetBlue Airways’ peers offer better gains? JetBlue Airways Stock Comparison With Peers summarizes how JBLU compares against peers on metrics that matter. You can find more such useful comparisons on Peer Comparisons.

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