It's funny. A stock might rise 150%, as JetBlue Airways (NASDAQ:JBLU) has since January, and when it falls 7% in a day, journalists everywhere cover the story as if it means disaster for shareholders. In fact, the company reported strong third-quarter results, but as is often the case, the stock -- which had run up ahead of the announcement -- sold off on the event.

The stock price is now where it was a few weeks ago (which is up from a few weeks before that), and shareholders have another successful quarter under their belts. And despite all the gloom from journalists, Jetblue's shares have made a steady ascent since going public in April 2002, for good reason.

In quarter three, revenue jumped 66% to $274 million, while earnings rose 116% to $0.39 per share, or $29 million. For the year, the company is expected to see $1 billion in sales and $1.38 in earnings per share, up 64%.

The low-cost, high-touch airline continues to expand, adding 66% more flight capacity compared to a year ago, while traffic -- or revenue passenger miles -- rose 72%. Apparently, last quarter's public relations snafu (sharing passenger data with the government) didn't dampen sales. Nearly 88% of available seats were filled as customer demand more than kept pace with increased supply.

Meanwhile, due to strong hands on the cost controls, the company lifted operating margins to 19.7%, well above last year's 13.6%.

In a separate release, JetBlue announced the launch of new services from Boston to Los Angeles beginning in January with a $99 introductory rate. As the company adds routes of greater distance, it will increase its average flight cost and lower its average income per flight mile, as it did in the third quarter. Yield per passenger mile dropped 4.1% as flight lengths grew about 7%.

However, as long as JetBlue keeps growing the bottom line, the stock may have permission to stay afloat. Competitor Southwest (NYSE:LUV) serves as an example, maintaining a P/E above 30, despite its many skeptics, because the airline continues to increase profits at a healthy clip.

At $62 per share, JetBlue is a rich ride nonetheless, fetching 45 times this year's earning estimate, and 35 times the 2004 estimate -- income is expected to rise 28% that year. Jetblue will almost surely ["Stop calling me Shirley"] need to handily top the 2004 estimate to maintain its lofty valuation.

Whitney Tilson wrote a series of articles examining JetBlue, now in his archives .