Why JetBlue Airways Stock Fell 18.8% in the 3rd Quarter



Stock fell in 3Q17

JetBlue Airways (JBLU) stock fell 18.8% in the third quarter of 2017. It fell 10.9% in the second quarter and rose 8.1% in the first quarter. However, the stock has risen 9.2% so far in October. That came on the back of the airline reporting better unit revenue guidance for the third quarter, despite the damage caused by Hurricanes Harvey, Irma, and Maria.

Airline stocks have been on a losing streak for the past couple of days on concerns of industry overcapacity, which is leading to price discounts.

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YTD performance

As of October 16, 2017, JetBlue Airways has fallen 9.7% YTD (year-to-date), closing at $20.20. Ultra-low-cost carriers Spirit Airlines (SAVE) and Allegiant Travel (ALGT) have underperformed all airline stocks. SAVE has fallen 42.1% so far this year, and ALGT has fallen 15.9%.

Alaska Air (ALK) has fallen 9.3% YTD, followed by United Continental Holdings (UAL), which has fallen 8.1%. On the other hand, Delta Air Lines (DAL) has risen 9.0%, and American Airlines (AAL) has risen 11.9%. Southwest Airlines (LUV) remains the industry outperformer with an 18.2% rise YTD.

The broader market tracked by the SPDR S&P 500 ETF (SPY) has risen 14.2% YTD. The Consumer Discretionary SPDR ETF (XLY) has risen 11.1% YTD.

Series overview

JetBlue Airways (JBLU) is expected to release its third-quarter earnings on October 24, 2017. In this series, we’ll look at its expansion plans, declining profitability, and valuations. We’ll also look at analysts’ expectation for 2017.


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