JetBlue shares rise nearly 19% after demand outlook offsets loss concerns
JetBlue shares rebounded after the carrier projected stronger revenue trends, though losses, fuel costs and debt remain substantial.
By Hana Yoshida · Markets Reporter
2 min read
JetBlue shares rose nearly 19% in early Tuesday trading after the airline offered a more upbeat demand and revenue outlook alongside third-quarter results, CNBC reported. The JetBlue stock surge followed a Monday close at an all-time low, according to The Wall Street Journal, but the carrier still reported a wider loss, higher fuel costs and $8.4 billion in debt.
JetBlue said strong demand and higher yields helped revenue exceed its initial expectations and enabled it to recover more of its added fuel expense than it had expected. Chief Executive Joanna Geraghty said that momentum had continued into the fourth quarter, CNBC reported.
Why did JetBlue stock rise after its quarterly loss?
Investors appeared to focus on JetBlue's forecast that fourth-quarter revenue per available seat mile could increase by as much as 22%. The measure tracks operating revenue generated for each seat flown one mile. The company forecast full-year growth of 13.5% to 14.5% for the metric, CNBC reported.
JetBlue's average fare rose more than 19% from a year earlier to $245.11 in the third quarter, according to CNBC. The carrier has been pursuing a multiyear plan built around cost reductions and more revenue from premium seating, after last reporting an annual profit in 2019.
Losses and debt remain a challenge
For the three months ended Sept. 30, JetBlue reported a net loss of $257 million, compared with a $143 million loss a year earlier, CNBC reported. Fuel expense climbed 61% to $868 million.
The quarterly figures also fell slightly short of the Wall Street expectations compiled by LSEG and cited by CNBC. JetBlue posted an adjusted loss of 60 cents a share, versus an expected loss of 55 cents, while revenue was $2.81 billion, compared with the $2.82 billion estimate.
JetBlue said it ended the quarter with $2.2 billion in liquidity and $7 billion of unencumbered assets, including $2.8 billion in aircraft and engines. It reported total debt of $8.4 billion as of Sept. 30.
Chief Financial Officer Ursula Hurley said the airline believes it has enough liquidity and financing options to bridge to at least $1 in earnings per share and positive free cash flow in 2028. That is management's outlook, not a confirmed result.
The Wall Street Journal reported that JetBlue's shares had fallen close to 10% on Monday to $2.37, marking a third consecutive all-time-low close. CNBC also reported that the Journal had said a group of JetBlue senior creditors was working with restructuring adviser PJT Partners; the reported activity does not establish that JetBlue has entered restructuring.
This story draws on original reporting from CNBC.