JetBlue’s 4Q Revenue Tops Analysts’ Estimates; Shares Gain

JetBlue Airways’ fourth-quarter sales plunged 67% to $661 million year-on-year but beat analysts’ estimates of $639.8 million due to the pandemic-led restrictions on travel. Shares rose about 1% in Thursday’s morning trading.

JetBlue (JBLU) had been expecting a 70% revenue decline in the reported quarter. The company posted a loss of $1.53 per share in 4Q, which exceeded consensus estimates of a loss of $1.69 per share.

“2020 was a year like no other, as the COVID-19 pandemic challenged our industry in ways we have never seen before,” JetBlue’s CEO Robin Hayes. “As we moved through 2020, we meaningfully reduced our cash burn, and are starting to shift our focus to rebuilding our margins. We remain cautiously optimistic that demand trends will improve later this year. We believe our initiatives will allow us to emerge with structurally better margins.”

The company ended the fourth quarter with $3.1 billion in cash and cash equivalents on its balance sheet. (See JBLU stock analysis on TipRanks)

Looking ahead, JetBlue expects its 1Q21 EBITDA to be negative and in the range of $525 million to $625 million. The airline plans to reduce its total operating cost by $1.2 billion in FY21.

Earlier this month, Vertical Research analyst Darryl Genovesi downgraded the stock from Buy to Hold with a price target of $20. Genovesi said in a research note on Jan. 15 that JetBlue’s coming “capex ramp” could result in a lower return on invested capital, which was already below the company’s peers and could take “another structural leg down”.

The rest of the Street is in line with Genovesi’s outlook with a Hold consensus rating. That’s based on 3 analysts recommending a Buy, 7 analysts suggesting a Hold, and 2 analysts suggesting a Sell. The average analyst price target of $16 implies 7% upside potential to current levels.

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