JetBlue (JBLU) reported its first-quarter 2017 results on April 25, 2017. The airline’s revenue fell 0.8% year-over-year or YoY to $1.6 billion while its earnings per share fell by a significant 59% year-over-year or YoY to $0.25. 1Q16 earnings were boosted due to Easter holidays. This year, Easter shifted to April. The airline also reported that its passenger unit revenue fell 5.8% during the first quarter of 2017 as low yields continued to impact unit revenues.
JBLU missed analyst consensus estimates on revenues by 15.7%. However, it beat earnings estimates. Analysts had estimated revenues of $1.9 billion and earnings per share of $0.23.
Despite the revenue miss, JetBlue Airways stock rose ~3.3% on the day of the earnings release to end at $22.47 at closing hours. This rise was mainly due to improved guidance for the second quarter. We’ll discuss this outlook in detail later on in this series.
Allegiant Travel (ALGT) also reported results on the same day and its stock fell 0.73% on April 25, 2017. Spirit Airlines (SAVE) also fell 0.22% on the same day, followed by Delta Air Lines (DAL), which fell 0.17%, and United Continental (UAL), which fell 0.04%. All other airlines have posted gains. American Airlines (AAL) rose 0.37%, Alaska Air (ALK) rose 0.82%, and Southwest Airlines (LUV) rose 1.1% on the same day.
The Consumer Discretionary Select Sector SPDR Fund (XLY) rose 0.79% on the same day. We compare airlines to the consumer discretionary sector since the airline industry depends on consumer spending. The broader market (SPY) fell slightly, 0.58%.
In this series, we’ll analyze JBLU’s performance for 1Q17. We’ll also discuss what factors are expected to drive JBLU’s growth in 2017. We’ll also discuss JetBlue’s guidance for the future. Finally, we’ll wrap up with a discussion of JBLU’s valuation multiple.