JetBlue Shares Hit Turbulence Amid Warnings Of Wider-Than-Expected Q4 Loss

Shares of JetBlue Airways Corp. slid 7% during premarket trading in New York. This drop came after the budget airline warned about increasing headwinds that are anticipated to result in a larger-than-anticipated loss for the fourth quarter. Additionally, the company fell short of Wall Street estimates for both loss and revenue in the third quarter. 

"While we faced challenges in the quarter, including significant weather-related impacts and rising fuel prices, our Crewmembers rose to the occasion, focusing on what we can control to mitigate these headwinds and provide our customers with great service," Robin Hayes, JetBlue's CEO, wrote in a statement, adding the airline is positioned for less turbulence "in 2024 and beyond." 

JetBlue reported a loss of $153 million, equivalent to 46 cents per share, in the third quarter. This compares with the previous year's third quarter when the airline had a net income of $57 million, or 18 cents per share. The adjusted loss for the recent quarter was 39 cents per share, exceeding the FactSet consensus estimate, which predicted a loss of 25 cents per share. Revenue also fell 8% to $2.35 billion, below FactSet consensus estimate of $2.38 billion. 

Third Quarter Results:

• Adjusted loss per share 39c, estimate loss/shr 28c

• Operating revenue $2.35 billion, estimate $2.37 billion

• Passenger operating rev. $2.20 billion, estimate $2.23 billion

• Adjusted net loss $129 million, estimate loss $91.7 million

• Adjusted Ebitda $32.0 million, estimate $64 million

• Available seat miles 17.36 billion, estimate 17.34 billion

• Revenue passenger miles 14.78 billion, estimate 14.65 billion

• Load factor 85.1%, estimate 84.4%

• Average passenger fare $201.73, estimate $198.16

• Operating expense per available seat mile $14.45, estimate $14.12 

• Yield per passenger mile 14.89c

Joanna Geraghty, JetBlue's President and COO, said: 

"We continue to see healthy travel demand during peak periods and the fourth quarter holidays. However, industry capacity is outpacing domestic demand during off peak travel periods.

"For the fourth quarter, our growth will be driven primarily by international as we proactively work to manage our capacity and reduce schedules in off-peak periods." 

 Fourth Quarter Forecast:

• Sees adjusted loss per share 35c to 55c, estimate loss/shr 21c

• Sees revenue -6.5% to -10.5%

• Sees available seat miles +0.5% to +3.5%

Year Forecast:

• Sees adjusted loss per share 45c to 65c, saw EPS 5.0c to EPS 40c, estimate loss/shr 35c (Bloomberg Consensus)

• Sees revenue +3% to +5%, saw +6% to +9%

• Sees available seat miles +5% to +7%, saw +5.5% to +8.5%

Besides JetBlue, several other airlines have warned about slowing US air travel demand: 

• Airline Stocks Hit Turbulence After Alaska Air Signals Slowing Demand
• JetBlue Joins Chorus Of Airlines Warning About Slipping Demand
• American Airlines Cuts Earnings Forecast As Headwinds Hit Airline Industry

Investors have dumped airline stocks since mid-July on souring demand outlooks from carriers. 

At the start of October, Morgan Stanley US equity strategist Michelle Weaver told clients to expect a "chilly season for travel" as headwinds mount for consumers.