What happened
JetBlue Airways (JBLU 3.85%) reported its first quarterly profit since the beginning of the pandemic, but the results still fell short of expectations. Investors were disappointed, sending JetBlue shares down more than 7% post-earnings.
So what
It has been a surprisingly strong earnings season for airline investors, with demand holding up better than some had feared given the economic uncertainty. But with each airline that has released earnings, expectations have improved, and on Tuesday JetBlue failed to deliver.
JetBlue reported adjusted earnings of $0.21 per share for the quarter on revenue of $2.56 billion, compared to analyst expectations for earnings of $0.24 per share on sales of $2.55 billion. Much of the miss is attributable to increased costs related to Hurricane Ian, which disrupted Florida operations in September.
"For the third quarter, we reached an important milestone in our recovery as we generated our first quarterly adjusted profit since the start of the pandemic," CEO Robin Hayes said in a statement. "We continue to see a growing appetite for JetBlue's unique customer value proposition of low fares and great service. With ample runway for growth ahead of us, we remain focused on execution and value creation for all our stakeholders."
NASDAQ: JBLU
Key Data Points
Now what
JetBlue guided for strong yields in the final three months of the year, meaning the airline is expecting demand to keep up heading into the holiday season and costs to be under control. The company is also making progress with its planned acquisition of Spirit Airlines (SAVE +0.00%), which is a key to JetBlue's long-term growth plan.
There isn't much reason for concern in JetBlue's report, but in an earnings season where rivals including Delta Air Lines and United Airlines Holdings easily beat expectations and provided rosy outlooks for 2023 and beyond, investor expectations right now are sky high.
JetBlue is a work in progress, and has a long journey ahead of it to get the Spirit deal past regulators. The quarter, though solid, did little to change the long-term outlook for JetBlue, and investors on Tuesday are reacting with a yawn.
