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JetBlue Stock Price Dropped 6%. Here’s Why.

Story Highlights

JetBlue’s profitability concerns continued in the second quarter as losses came in wider than expectations. However, growth in some of the key operating metrics reported by the company provided support to the stock

JetBlue Airways Corporation (NASDAQ: JBLU) reported wider-than-expected losses for the second quarter ended June 30, 2022. However, revenues were in-line with the consensus estimate. Following the Q2 results, shares of the company declined about 6% during normal trading hours.

Revenues Rise, Losses Narrow

JetBlue reported quarterly operating revenues of $2.45 billion, up 63.1% from the year-ago quarter. Year-over-year growth of 65.8% to $2.30 billion in the company’s core passenger revenues drove the overall growth in revenues for the company.

The company reported an adjusted loss per share of $0.47, which was better than the previous year’s loss of $0.65 per share. However, the loss was greater than the consensus estimate of a loss of $0.11 per share.

Meanwhile, the company reported year-over-year growth of 35.7% to 14.90 cents in revenue per available seat miles. Also, JetBlue reported an increase of 26.6% from the prior year in average fare to $221.38.

Management’s Commentary

The management remains confident about its prospects of moving into profitability in the third quarter. However, it remains wary of the rising fuel costs.

CEO of JetBlue, Robin Hayes said, “We reported a record-breaking revenue result for the second quarter, and we’re on pace to top it again here in the third quarter and drive our first quarterly profit since the start of the pandemic. I’m proud to say that our operational performance improved significantly through the quarter, and we capitalized on the strong demand environment to deliver revenue growth above the top-end of our original guidance range. We’ve entered the third quarter with some solid momentum that we expect to carry through to a sustained profit inflection.”

It seems that top investors share the enthusiasm of the management about the stock as they are bulking up on its shares.

The TipRanks’ Stock Investors tool shows that top investors currently have a Very Positive stance on JBLU. Further, 22.4% of the top portfolios tracked by TipRanks, increased their exposure to JBLU stock over the past 30 days.

Wall Street’s Take

Overall, consensus among analysts for JetBlue stock is a Hold based on three unanimous Holds. The JBLU average price target of $9 implies upside potential of 11.9% from current levels. Shares have declined 45.6% over the past year.

Final Thoughts

JetBlue reported wider-than-expected losses for the second quarter. Though the company reported a rise in its operating revenues, rising costs and high inflation continue to remain concerns. However, the company’s impending buyout of Spirit Airlines could position it as a serious challenger to the hegemony of the “Big 4.”

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