JetBlue posts first quarterly loss since IPO
Wed Feb 1, 2006 9:16 AM ET
By Paritosh Bansal
JetBlue posts first quarterly loss since IPO
NEW YORK, Feb 1 (Reuters) - JetBlue Airways Corp. (JBLU.O: Quote, Profile, Research) on Wednesday posted its first quarterly loss since its 2002 initial public offering and forecast losses for the coming year, sending its shares down nearly 8 percent in premarket trading.
JetBlue's loss exceeded Wall Street expectations, but analysts said they were more concerned about its forecast for losses in the first quarter and for the full year.
Helane Becker, an analyst at the Benchmark Company, said she expected the airline's shares to be under pressure this year. "It is the guidance for continued loss, which is obviously very bearish for the stock."
The No. 2 U.S. low-cost carrier reported a fourth-quarter net loss of $42.4 million, or 25 cents a share, compared with a net profit of $1.5 million, or 1 cent a share, a year earlier.
Excluding exceptional items, the airline lost 19 cents a share, compared with Wall Street expectations of a loss of 16 cents a share, according to Reuters Estimates.
U.S. airlines have been under pressure as high fuel costs and increasing competition -- including from other low-cost carriers -- squeeze profits all around, even pushing some companies into bankruptcy.
But Becker said JetBlue's loss outlook was specific to the carrier and did not reflect a trend for the low-cost carrier industry overall.
"They have some issues that are specific to them," she said, adding that JetBlue was not hedged enough on fuel and was expected to buy more aircraft this year, adding to its costs.
New York-based JetBlue said operating revenue rose 34 percent to $446 million as the airline added new routes to Boston and other destinations.
But the discount carrier said its average fuel costs surged 50.3 percent to $1.87 per gallon in the quarter.
Ray Neidl, an analyst at Calyon Securities, said JetBlue's earnings not only fell short of his expectations, but he had also been expecting the carrier to post a profit for 2006. Neidl rates the stock "neutral."
The airline expects to report a negative operating margin of between 3 percent and 5 percent in the first quarter, assuming fuel would cost $1.92 per gallon.
For 2006, it expects to report an operating margin between 2 percent and 4 percent, based on an assumed aircraft fuel cost of $1.98 per gallon, net of hedges.
It expects to increase capacity between 27 percent and 29 percent in the first quarter, compared with last year.
The stock was down 77 cents, or 5.9 percent, at $12.27 on the Inet electronic brokerage system after closing on Tuesday at $13.04 on Nasdaq.
A one-time outperformer among U.S. airlines, JetBlue stock has come back down to earth. So far this year, its shares are down 15 percent, compared with a 5.5 percent drop in the sectoral Amex Airlines index.
Wed Feb 1, 2006 9:16 AM ET
By Paritosh Bansal
JetBlue posts first quarterly loss since IPO
NEW YORK, Feb 1 (Reuters) - JetBlue Airways Corp. (JBLU.O: Quote, Profile, Research) on Wednesday posted its first quarterly loss since its 2002 initial public offering and forecast losses for the coming year, sending its shares down nearly 8 percent in premarket trading.
JetBlue's loss exceeded Wall Street expectations, but analysts said they were more concerned about its forecast for losses in the first quarter and for the full year.
Helane Becker, an analyst at the Benchmark Company, said she expected the airline's shares to be under pressure this year. "It is the guidance for continued loss, which is obviously very bearish for the stock."
The No. 2 U.S. low-cost carrier reported a fourth-quarter net loss of $42.4 million, or 25 cents a share, compared with a net profit of $1.5 million, or 1 cent a share, a year earlier.
Excluding exceptional items, the airline lost 19 cents a share, compared with Wall Street expectations of a loss of 16 cents a share, according to Reuters Estimates.
U.S. airlines have been under pressure as high fuel costs and increasing competition -- including from other low-cost carriers -- squeeze profits all around, even pushing some companies into bankruptcy.
But Becker said JetBlue's loss outlook was specific to the carrier and did not reflect a trend for the low-cost carrier industry overall.
"They have some issues that are specific to them," she said, adding that JetBlue was not hedged enough on fuel and was expected to buy more aircraft this year, adding to its costs.
New York-based JetBlue said operating revenue rose 34 percent to $446 million as the airline added new routes to Boston and other destinations.
But the discount carrier said its average fuel costs surged 50.3 percent to $1.87 per gallon in the quarter.
Ray Neidl, an analyst at Calyon Securities, said JetBlue's earnings not only fell short of his expectations, but he had also been expecting the carrier to post a profit for 2006. Neidl rates the stock "neutral."
The airline expects to report a negative operating margin of between 3 percent and 5 percent in the first quarter, assuming fuel would cost $1.92 per gallon.
For 2006, it expects to report an operating margin between 2 percent and 4 percent, based on an assumed aircraft fuel cost of $1.98 per gallon, net of hedges.
It expects to increase capacity between 27 percent and 29 percent in the first quarter, compared with last year.
The stock was down 77 cents, or 5.9 percent, at $12.27 on the Inet electronic brokerage system after closing on Tuesday at $13.04 on Nasdaq.
A one-time outperformer among U.S. airlines, JetBlue stock has come back down to earth. So far this year, its shares are down 15 percent, compared with a 5.5 percent drop in the sectoral Amex Airlines index.
