Please ensure Javascript is enabled for purposes of website accessibility

JetBlue Airways Corporation Earnings: A Comeback Has Begun

By Adam Levine-Weinberg - Jul 25, 2017 at 9:53AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The popular airline returned to strong revenue and earnings growth in the second quarter of 2017.

JetBlue Airways (JBLU 4.25%) started 2017 in disappointing fashion, as earnings plunged by 59% in the first quarter. However, management remained optimistic that results would improve in short order.

Indeed, JetBlue bounced back in a big way in the second quarter, boosted by the favorable timing of Easter. As a result, it logged double-digit increases in revenue and earnings last quarter. Furthermore, its outlook for the rest of the year is solid.

JetBlue Airways results: The raw numbers


Q2 2017

Q2 2016

Year-Over-Year Change


$1.84 billion

$1.64 billion


Total unit revenue

12.93 cents

12.09 cents


Cost per available seat mile excluding fuel

8.16 cents

7.76 cents


Net income

$211 million

$180 million


Pre-tax margin




Adjusted EPS




Data source: JetBlue Airways Q2 earnings release. Chart by author.

What happened with JetBlue Airways this quarter?

Following more than a year of sometimes steep unit-revenue declines, JetBlue got revenue per available seat mile (RASM) growing again last quarter. Entering the quarter, management had expected RASM to rise 3%-6% year over year. Ultimately, the company reported a phenomenal 7% year-over-year RASM gain for the quarter.

JetBlue attributed 1.25 percentage points of this increase to two discrete factors: a higher-than-normal number of flight cancellations during Q2 and incentive payments from its credit card partnership. Still, even excluding these factors, RASM would have reached the high end of the company's guidance range.

A JetBlue Airways plane

JetBlue Airways' unit revenue surged 7% last quarter. Image source: JetBlue Airways.

Meanwhile, non-fuel unit costs rose 5.1% last quarter and the average jet fuel-price paid jumped by 12.3%. While those were both significant increases, the non-fuel unit-cost increase was below the midpoint of JetBlue's guidance range, and fuel costs came in well below management's original forecast. As a result, JetBlue's net income rose 16.7% year over year in Q2, and earnings per share skyrocketed by about 21%.

What management had to say

Not surprisingly, JetBlue's management was very pleased with the company's performance last quarter. "Our second quarter unit revenue exceeded our initial guidance as a result of our targeted revenue initiatives and a solid demand environment," said JetBlue CEO Robin Hayes.

Hayes also noted that JetBlue's strong second-quarter results kept the company on a path to produce margins above the industry average. CFO Steve Priest echoed those comments, stating:

We are committed to driving improved margins and we are making good progress as we execute our structural cost program. We succeeded in controlling unit cost pressures during the quarter despite a lower completion factor and will continue to bring intensity and discipline to the effort.

Looking forward

JetBlue's outlook for the third quarter isn't quite as strong as its stellar second-quarter results. The company expects to keep RASM growing, but at a much slower rate, primarily due to tougher year-over-year comparisons and less favorable timing of holidays. The midpoint of JetBlue's guidance range calls for a 1% RASM increase this quarter.

On the bright side, non-fuel unit-cost growth will moderate substantially in the second half of the year. For the third quarter, JetBlue expects a 1.5%-3.5% increase compared to a 4.2% rise in the first half, as a whole. Furthermore, based on the company's full-year guidance, non-fuel unit-cost growth should be close to zero in the fourth quarter.

JetBlue's guidance implies that earnings per share may rise again in the third quarter, but at a much slower rate. Still, by comparison to JetBlue's steep first-quarter earnings plunge, this would be a very solid result.

Adam Levine-Weinberg owns shares of JetBlue Airways and is long January 2019 $10 calls on JetBlue Airways. The Motley Fool recommends JetBlue Airways. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

JetBlue Airways Corporation Stock Quote
JetBlue Airways Corporation
$8.83 (4.25%) $0.36

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 08/10/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.