JetBlue’s 3Q14 earnings results miss the mark

JetBlue Airways Corporation’s (JBLU) reported earnings per share, or EPS, were 8.4% lower than analyst estimates. Its adjusted EPS was 8.6% lower than estimated. Wall Street analysts estimated JetBlue’s 3Q14 adjusted EPS to be $0.263, ~25% higher than in 3Q13. But JetBlue’s adjusted EPS was $0.24, only 14% higher than 3Q13 EPS. Wall Street analysts had estimated reported EPS for JetBlue to be $0.262, but the actual reported EPS was $0.24.

JetBlue Airways Corporation’s (JBLU) reported lower EPS than analysts had estimated. But on top of that, it reported 0.8% lower revenue and ~10% lower adjusted net income than projected, as well.

Wall Street analysts’ estimates for the fourth quarter are as follows:

• Revenue – $1,465 million, or year-over-year growth of 7.3%
• Operating profit – $159 million, or year-over-year growth of 38%
• Reported EPS – $0.22, or year-over-year growth of 40%
• Adjusted net income – 60% increase to $75.29 million
• Adjusted EPS – $0.23, or year-over-year growth of 65%
  •  Adjusted EPS for 1Q15 – increase to $0.14 from $0.01 in 1Q14

JetBlue has disappointed analysts because in five of the previous seven quarters, actual adjusted EPS was lower than estimated. The company exceeded analysts’ expectations in 2Q14 and 4Q13 only. In contrast, most of JetBlue’s peers, including Southwest Airlines Co. (LUV), Delta Air Lines, Inc. (DAL), United Continental Holdings Inc. (UAL), and Alaska Air Group, Inc. (ALK), exceeded analysts’ estimates in 3Q14.

The SPDR S&P Transportation ETF (XTN) and iShares Transportation Average ETF (IYT) hold airline stocks.