JetBlue Announces Third Quarter Results
Source: JetBlue 23/10/2008
-- Operating revenues for the quarter totaled $902 million, representing growth of 17.9% over operating revenues of $765 million in the third quarter of 2007.
-- Operating income for the quarter was $22 million, resulting in a 2.4% operating margin, compared to operating income of $79 million and a 10.3% operating margin in the third quarter of 2007.
-- Pre-tax loss for the quarter was $4 million, compared with pre-tax income of $46 million in the year-ago period.
-- Net loss for the quarter was $4 million, representing a net loss of $0.02 per diluted share, compared with third quarter 2007 net income of $23 million, or $0.12 per diluted share.
"We are pleased to report record revenue during the third quarter," said Dave Barger, JetBlue's CEO. "High fuel prices, however, continued to be a challenge during the quarter. While fuel prices have dropped dramatically in recent weeks, we are focused on the turmoil in the financial markets and the economic challenges that lie ahead. Despite the economic uncertainty, we see continued strength in our bookings in the near-term. We believe our strong brand, award-winning service and outstanding crewmembers will help us better manage through these challenging times."
Operational Performance
For the third quarter, revenue passenger miles remained flat at 6.8 billion on a capacity decrease of 2.4%, resulting in a third quarter load factor of 84.0%, an increase of 2.0 points year-over-year. Yield per passenger mile in the third quarter was 11.78 cents, up 13.2% compared to the third quarter of 2007. Passenger revenue per available seat mile (PRASM) for the third quarter 2008 increased 16.0% year-over-year to 9.89 cents and operating revenue per available seat mile (RASM) increased 20.8% year-over-year to 11.07 cents.
JetBlue's operating expense per available seat mile (CASM) for the third quarter increased 31.5% year-over-year to 10.80 cents. Excluding fuel, CASM increased 13.8% to 5.96 cents. During the quarter, JetBlue hedged approximately 45% of its fuel consumption resulting in a realized fuel price of $3.42 per gallon, a 60.8% increase over third quarter 2007 realized fuel price of $2.13. JetBlue realized $26 million in fuel hedging gains during the third quarter. Of this total, $1 million are unrealized gains which relate to fuel hedges for the fourth quarter 2008 and beyond which were required to be recognized in the third quarter and $3 million are related to other settlements in the third quarter.
Balance Sheet Update
JetBlue ended the third quarter with approximately $565 million in cash and cash equivalents and $305 million of auction rate securities. JetBlue has an additional $110 million available under its line of credit with Citigroup, which is secured by a portion of JetBlue's auction rate securities.
During the quarter, JetBlue repurchased $53 million of its $250 million 3.75% convertible notes due 2035 (which have a put date of March 2010) for $40 million. JetBlue repurchased an additional $20 million principal amount of these notes for $14 million in October. As a result of these repurchases, JetBlue reduced the outstanding principal amount of these notes from $250 million to $177 million.
"Market conditions created a unique opportunity for us to retire debt and lower future interest expense," said Ed Barnes, JetBlue's CFO. "With our focus on revenue enhancements, cost control, capacity rationalization and liquidity preservation, we believe that we are well-positioned to withstand today's uncertainty."
Fourth Quarter and Full Year Outlook
Looking ahead, for the fourth quarter of 2008, JetBlue expects to report an operating margin between five and seven percent based on an assumed aircraft fuel cost per gallon of $2.81, net of hedges. Pre-tax margin for the quarter is expected to be between one and three percent. PRASM is expected to increase between 18 and 20 percent year-over-year. RASM is expected to increase between 23 and 25 percent year-over-year. CASM is expected to increase between 20 and 22 percent over the year-ago period. Excluding fuel, CASM in the fourth quarter is expected to increase between 17 and 19 percent year-over-year. Capacity is expected to decrease between seven and nine percent in the fourth quarter and stage length is expected to decrease roughly five percent over the same period last year.
For the full year 2008, JetBlue expects to report an operating margin between two and four percent based on an assumed aircraft fuel cost per gallon of $3.02, net of hedges. Pre-tax margin for the full year is expected to be between negative one and one percent. PRASM for the full year is expected to increase between 14 and 16 percent year-over-year. RASM for the full year is expected to increase between 18 and 20 percent year-over-year. CASM for the full year is expected to increase between 21 and 23 percent over full year 2007. Excluding fuel, CASM in 2008 is expected to increase between eight and ten percent year-over-year. Capacity for the full year 2008 is expected to increase between zero and two percent over 2007 and stage length is expected to decrease about one percent over full year 2007.
JetBlue will conduct a conference call to discuss its quarterly earnings today, October 23, at 9:00 a.m. Eastern Time. A live broadcast of the conference call will be available via the internet at http://investor.jetblue.com.
Source: JetBlue 23/10/2008
-- Operating revenues for the quarter totaled $902 million, representing growth of 17.9% over operating revenues of $765 million in the third quarter of 2007.
-- Operating income for the quarter was $22 million, resulting in a 2.4% operating margin, compared to operating income of $79 million and a 10.3% operating margin in the third quarter of 2007.
-- Pre-tax loss for the quarter was $4 million, compared with pre-tax income of $46 million in the year-ago period.
-- Net loss for the quarter was $4 million, representing a net loss of $0.02 per diluted share, compared with third quarter 2007 net income of $23 million, or $0.12 per diluted share.
"We are pleased to report record revenue during the third quarter," said Dave Barger, JetBlue's CEO. "High fuel prices, however, continued to be a challenge during the quarter. While fuel prices have dropped dramatically in recent weeks, we are focused on the turmoil in the financial markets and the economic challenges that lie ahead. Despite the economic uncertainty, we see continued strength in our bookings in the near-term. We believe our strong brand, award-winning service and outstanding crewmembers will help us better manage through these challenging times."
Operational Performance
For the third quarter, revenue passenger miles remained flat at 6.8 billion on a capacity decrease of 2.4%, resulting in a third quarter load factor of 84.0%, an increase of 2.0 points year-over-year. Yield per passenger mile in the third quarter was 11.78 cents, up 13.2% compared to the third quarter of 2007. Passenger revenue per available seat mile (PRASM) for the third quarter 2008 increased 16.0% year-over-year to 9.89 cents and operating revenue per available seat mile (RASM) increased 20.8% year-over-year to 11.07 cents.
JetBlue's operating expense per available seat mile (CASM) for the third quarter increased 31.5% year-over-year to 10.80 cents. Excluding fuel, CASM increased 13.8% to 5.96 cents. During the quarter, JetBlue hedged approximately 45% of its fuel consumption resulting in a realized fuel price of $3.42 per gallon, a 60.8% increase over third quarter 2007 realized fuel price of $2.13. JetBlue realized $26 million in fuel hedging gains during the third quarter. Of this total, $1 million are unrealized gains which relate to fuel hedges for the fourth quarter 2008 and beyond which were required to be recognized in the third quarter and $3 million are related to other settlements in the third quarter.
Balance Sheet Update
JetBlue ended the third quarter with approximately $565 million in cash and cash equivalents and $305 million of auction rate securities. JetBlue has an additional $110 million available under its line of credit with Citigroup, which is secured by a portion of JetBlue's auction rate securities.
During the quarter, JetBlue repurchased $53 million of its $250 million 3.75% convertible notes due 2035 (which have a put date of March 2010) for $40 million. JetBlue repurchased an additional $20 million principal amount of these notes for $14 million in October. As a result of these repurchases, JetBlue reduced the outstanding principal amount of these notes from $250 million to $177 million.
"Market conditions created a unique opportunity for us to retire debt and lower future interest expense," said Ed Barnes, JetBlue's CFO. "With our focus on revenue enhancements, cost control, capacity rationalization and liquidity preservation, we believe that we are well-positioned to withstand today's uncertainty."
Fourth Quarter and Full Year Outlook
Looking ahead, for the fourth quarter of 2008, JetBlue expects to report an operating margin between five and seven percent based on an assumed aircraft fuel cost per gallon of $2.81, net of hedges. Pre-tax margin for the quarter is expected to be between one and three percent. PRASM is expected to increase between 18 and 20 percent year-over-year. RASM is expected to increase between 23 and 25 percent year-over-year. CASM is expected to increase between 20 and 22 percent over the year-ago period. Excluding fuel, CASM in the fourth quarter is expected to increase between 17 and 19 percent year-over-year. Capacity is expected to decrease between seven and nine percent in the fourth quarter and stage length is expected to decrease roughly five percent over the same period last year.
For the full year 2008, JetBlue expects to report an operating margin between two and four percent based on an assumed aircraft fuel cost per gallon of $3.02, net of hedges. Pre-tax margin for the full year is expected to be between negative one and one percent. PRASM for the full year is expected to increase between 14 and 16 percent year-over-year. RASM for the full year is expected to increase between 18 and 20 percent year-over-year. CASM for the full year is expected to increase between 21 and 23 percent over full year 2007. Excluding fuel, CASM in 2008 is expected to increase between eight and ten percent year-over-year. Capacity for the full year 2008 is expected to increase between zero and two percent over 2007 and stage length is expected to decrease about one percent over full year 2007.
JetBlue will conduct a conference call to discuss its quarterly earnings today, October 23, at 9:00 a.m. Eastern Time. A live broadcast of the conference call will be available via the internet at http://investor.jetblue.com.