Humty72
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Associated Press
JetBlue 2Q Profits Down 77 Percent
Thursday July 22, 6:43 pm ET Fuel Costs, Increased Competition Push JetBlue Second-Quarter Profits Down 77 Percent
NEW YORK (AP) -- JetBlue Airways Corp. said Thursday its second-quarter profits fell 77 percent due to high fuel costs and increased fare competition from the low-cost carrier's rivals.
JetBlue earned $21.5 million, or 19 cents a share, compared with $38 million, or 36 cents a share, in the same quarter a year ago.
A survey of analysts by Thomson First Call projected earnings of 21 cents a share for the quarter.
Revenue rose 31 percent to $319.7 million from $244.7 million a year ago. But operating expenses increased 38 percent to $274.6 million in the quarter.
Revenue passenger miles rose 41 percent to 3.9 billion miles in the quarter. Load factor, or the percentage of seats filled, was 84.5 percent in the quarter, compared with 85.3 percent a year earlier.
Net income for the first six months of the year fell 34 percent to $36.6 million on revenue of $608.7 million, compared with earnings of $55.3 million on revenue of $461.8 million in the first half of last year.
Despite the extremely competitive revenue environment and high fuel prices, the New York-based airline said strong cost containment resulted in a solid operating margin.
On a conference call with analysts Thursday, chairman and chief executive David Neeleman said 2004 operating margins will be in a range of 12 percent to 14 percent, a percentage point less than the 13 percent to 15 percent seen earlier.
Neeleman said JetBlue will be more aggressive with fares.
"We will lead some fare sales," he said. "If a flight's not going to sell out, let's make sure we're very competitive." He said customer reaction to JetBlue's fall fare sale, with $49 dollar fares to Florida, has been "astonishing."
Overall, the company said short-term bookings are soft, with longer-term bookings about flat with a year ago.
JetBlue will continue to grow, adding 40 percent to 42 percent capacity in 2004. The company is in negotiations for a new terminal at its New York City hub and Neeleman said the company thinks it can double the size of its operations at New York's John F. Kennedy International Airport even before moving to a new terminal.
John Owen, chief financial officer, said the company had expected fuel to cost 92 cents a gallon in the second quarter, but the actual cost was 97 cents. For the full year, the airline is assuming fuel costs of 92 cents a gallon. But, Owen said, third-quarter fuel costs look now to be "in the high 90s."
JetBlue Wednesday signed agreements with both chairman and chief executive David Neeleman and president and chief operating officer Dave Barger to extend their contracts with the company. Neeleman's employment has been extended through August 2009, while Barger's employment has been extended through August 2008.
JetBlue shares closed Thursday at $23.89, up 34 cents on the Nasdaq Stock Market. It released its results after financial markets closed, and rose 6 cents to $23.95 in after-hours trading.
JetBlue 2Q Profits Down 77 Percent
Thursday July 22, 6:43 pm ET Fuel Costs, Increased Competition Push JetBlue Second-Quarter Profits Down 77 Percent
NEW YORK (AP) -- JetBlue Airways Corp. said Thursday its second-quarter profits fell 77 percent due to high fuel costs and increased fare competition from the low-cost carrier's rivals.
JetBlue earned $21.5 million, or 19 cents a share, compared with $38 million, or 36 cents a share, in the same quarter a year ago.
A survey of analysts by Thomson First Call projected earnings of 21 cents a share for the quarter.
Revenue rose 31 percent to $319.7 million from $244.7 million a year ago. But operating expenses increased 38 percent to $274.6 million in the quarter.
Revenue passenger miles rose 41 percent to 3.9 billion miles in the quarter. Load factor, or the percentage of seats filled, was 84.5 percent in the quarter, compared with 85.3 percent a year earlier.
Net income for the first six months of the year fell 34 percent to $36.6 million on revenue of $608.7 million, compared with earnings of $55.3 million on revenue of $461.8 million in the first half of last year.
Despite the extremely competitive revenue environment and high fuel prices, the New York-based airline said strong cost containment resulted in a solid operating margin.
On a conference call with analysts Thursday, chairman and chief executive David Neeleman said 2004 operating margins will be in a range of 12 percent to 14 percent, a percentage point less than the 13 percent to 15 percent seen earlier.
Neeleman said JetBlue will be more aggressive with fares.
"We will lead some fare sales," he said. "If a flight's not going to sell out, let's make sure we're very competitive." He said customer reaction to JetBlue's fall fare sale, with $49 dollar fares to Florida, has been "astonishing."
Overall, the company said short-term bookings are soft, with longer-term bookings about flat with a year ago.
JetBlue will continue to grow, adding 40 percent to 42 percent capacity in 2004. The company is in negotiations for a new terminal at its New York City hub and Neeleman said the company thinks it can double the size of its operations at New York's John F. Kennedy International Airport even before moving to a new terminal.
John Owen, chief financial officer, said the company had expected fuel to cost 92 cents a gallon in the second quarter, but the actual cost was 97 cents. For the full year, the airline is assuming fuel costs of 92 cents a gallon. But, Owen said, third-quarter fuel costs look now to be "in the high 90s."
JetBlue Wednesday signed agreements with both chairman and chief executive David Neeleman and president and chief operating officer Dave Barger to extend their contracts with the company. Neeleman's employment has been extended through August 2009, while Barger's employment has been extended through August 2008.
JetBlue shares closed Thursday at $23.89, up 34 cents on the Nasdaq Stock Market. It released its results after financial markets closed, and rose 6 cents to $23.95 in after-hours trading.
