JetBlue Airways (NASDAQ:JBLU) Corporation (NASDAQ:JBLU) ended the third quarter of 2023 with a loss of 39 cents per share, a significant increase from previous figures. This widening loss has been attributed to an 11.8% sequential surge in fuel prices, pushing average costs to $2.94 per gallon, and weather-related disruptions. The airline's operating revenues also experienced a decline, sliding by 8.16% year-on-year (YoY) to $2,353 million.
The Northeast air traffic control problems significantly impacted passenger revenues, which fell to $2,201 million. Despite these challenges, JetBlue reported a consolidated traffic improvement of 5.8%, which prompted a capacity increase of 7.1% to 17,362 million. However, the load factor contracted by 100 basis points to 85.1%.
Operating costs escalated by 3.5% to $2,509 million due to a substantial salary and wages increase of 17%. At the end of Q3, JetBlue had cash and equivalents of $973 million and total debt had increased to $4,001 million, up from $3,647 million at the end of 2022.
Looking ahead into the fourth quarter of 2023, JetBlue anticipates a capacity increase between 0.5% and 3.5%, a cost per available seat mile (CASM) rise between 8.5% and 10.5%, and a revenue drop between 6.5% and 10.5%. The average fuel cost per gallon is expected to range from $3.05 to $3.20.
For the full year of 2023, JetBlue forecasts a capacity growth between 5% and 7%, a CASM increase between 4.5% and 5.5%, and revenue growth between 3% and 5%. The company's revised earnings guidance projects a loss per share in the range of 45-65 cents, contrasting the earlier earnings forecast in the 5-40 cents band.
In comparison, United Airlines (NASDAQ:UAL) posted Q3 earnings per share of $3.65, surpassing estimates and marking a 29.9% YoY improvement. American Airlines (NASDAQ:AAL) also reported earnings of 38 cents per share, beating estimates with slight YoY operating revenue growth.
InvestingPro Insights
In light of the data from InvestingPro, JetBlue Airways Corporation is operating with a significant debt burden, which aligns with the increase in total debt to $4,001 million reported in the article. The company is also trading at a low Price / Book multiple of 0.35 as of Q3 2023, indicating that the market values it less than its book value. This could be due to the market's anticipation of the company's profitability, as suggested by the negative P/E ratio of -7.53.
InvestingPro Tips indicate that the stock is in oversold territory, meaning that it may be undervalued and could potentially rebound. However, the company is also quickly burning through cash, which might be a concern for investors. It is worth noting that 11 analysts have revised their earnings downwards for the upcoming period, which aligns with the company's revised earnings guidance projecting a loss per share.
InvestingPro offers an additional 15 tips for JBLU that could provide further insights into the company's financial health and market performance. These tips, along with real-time data, can be a valuable resource for investors seeking to make informed decisions about their investments in the airline industry.
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