JetBlue Airways (JBLU) reported its 2Q16 results on July 26, 2016. The airline’s revenue increased by 1.9% YoY (year-over-year) to ~$1.6 billion, while its EPS (earnings per share) jumped by a strong 20.5% YoY to $0.53 on lower fuel prices. The airline also reported that its passenger unit revenue fell by 8.2% in 2Q16 as low yields continued to impact unit revenues.
JBLU slightly missed analyst consensus estimates on revenues but managed to beat earnings estimates. Analysts had estimated revenues of ~$1.7 billion and earnings per share of $0.49. (For more details on analyst expectations, you can read our pre-earnings analysis series of JetBlue, JetBlue Airways 2Q16: What Can Investors Expect?)
Market washes away initial excitement
The stock market welcomed this performance, and JetBlue’s stock rose by about 8% during the results day to end at $18.67 at closing hours. Earlier in July, US airline stocks recorded the highest gain in more than one year.
Spirit Airlines (SAVE) and Southwest Airlines (LUV) were both up by 2.5% on July 26, 2016. American Airlines Group (AAL) was up by 2%, United Continental Holdings (UAL) by 1.8%, and Alaska Air Group (ALK) by 1.7%. Delta Air Lines (DAL) was flat at 0.2%, while Allegiant Travel (ALGT) lost 0.6%.
In this series, we’ll analyze JBLU’s performance for 2Q16. We’ll also discuss what factors are expected to drive JBLU’s growth in 2016, and we’ll wrap up with a discussion of JBLU’s valuation multiple.