Jetblue earnings decline

[DrinkSweetTea]

NEW YORK (Reuters) - Low-cost airline JetBlue Airways Corp. (JBLU.O: Quote, Profile, Research) on Thursday reported its first decline in quarterly earnings since it went public, as competition increased and seasonal sluggishness affected some of its routes.

JetBlue, which has reported a profit each quarter since its initial public offering in April 2002, said net income fell to $15.2 million, or 14 cents a share, in the first quarter, down from $17.4 million, or 17 cents a share, a year earlier.

Wall Street analysts, on average, expected 12 cents a share, according to Reuters Research, a unit of Reuters Group, Plc.

Earlier this year, the New York-based airline said 2004 would be a challenging year as it faces higher maintenance and fuel costs. JetBlue also faces competition from larger carriers determined to punch back at an upstart that cut deep into some of their busiest markets.

Operating revenue grew more than 33 percent to $289 million as the carrier expanded rapidly to increase passenger count by adding planes and routes.

© Reuters 2004. All Rights Reserved.

 

[blahshmah]

A decline was definitely expected this month. I'm pleasantly surprised to see jetblue beat the average estimates.

 

[BLUE BAYOU]

In light of competition which marketed free tickets on many of our overlapping routes, these numbers are quite acceptable!

 

[SWA/FO]

Free tickets? Who was giving them out?

 

[Dizel8]

A couple of Airlines decided, that it seemed like a good idea, to make a 2 for 1 deal. Fly two, get one anywhere the airline went. Believe AA started, with DAL right on their heels, not sure who else joined the give-away.

 

[SWA/FO]

understand.

 

[furloughfodder]

With labor and maintenance costs starting to rise at JB (i.e. people starting to actually move up the pay scale and airplanes that are no longer brand new needing more major repairs), do you think the airline has properly prepared itself to be fully competitive in the future?

Also what is the TRUTH about the airplane and ground equipment lease deals they got when they first started? It has always floated around that they got differed leases with very small payments for the first 3-4 years, and after that it is supposed to go up. Is this true?

Where do you guys think this airline will be in 5-10 years…when it is facing the cost realities of the other companies?

 

[Dizel8]

As far as the leases are concerned, I think it has been beaten to death. If you wish, you can look at the financials jetBlue makes available, the lease term and payments are in there.

As far as what will happen in five years, with this industry, that is kind of hard to speculate. Good news is CASM went down compared to last year.

Paywise, we are relatively close to median, looking just pure hourly, of course, profit sharing and CSPP is added bonusses.
I think many, would rather have good pay and stability, like SWA, than the continual ups and downs (No pun intended) that certain carriers unfortunately have faced. Don't get me wrong, I would love the DAL payscale, but in this enviroment, it seems unsustainable.

 

[jbucpt]

furloughfodder;

you must be out of the loop...WE DO NOT PAY FOR OUR AIRCRAFT OR MX.......

 

[furloughfodder]

furloughfodder;

you must be out of the loop...WE DO NOT PAY FOR OUR AIRCRAFT OR MX.......

That's what I thought.

 

[holdon]

double digit margin = good problem to have

 

[SMMustang]

With labor and maintenance costs starting to rise at JB (i.e. people starting to actually move up the pay scale and airplanes that are no longer brand new needing more major repairs), do you think the airline has properly prepared itself to be fully competitive in the future?

Fodder,

I plan on selling my JBLU in 2010. Hopefully that will be before the next big downturn in the economy. Not that JB is going to roll over at that point, but it will not longer see the growth that it is experiencing now.

Listen carefully to what is being said about the positives about JB. Most of it is because it is a small airline and can be nimble at this point. For example, it is easier to listen to the complaints of 600 pilots and try to do something about it, but when 6000 are screaming at you it is a different deal. During the next economic boom, other carriers will be able to drive someone like Virgin out of business, but JB is too big now to be burried. Could it be bought or merged? Oh, how I'd love that with the stock I own, but it won't belly up.

SWA has done a wonderful job keeping the peace, but you see some ripples like the FAs right now. It is not a big ripple, but they seem to be playing he said/she said in the media.

 

[sleepy]

Defering lease payments for the first 4 or 5 years seems like a smart thing for a start-up airline to do. What could be wrong with that?

 

[Dizel8]

I was going to, but it just isn't worth it

 

[BLUE BAYOU]

I guess not so good news is great for stock if you're following it-- up over 12% and $3.11 per share today... Tomorrow the profit takers will probably send it down to where it opened today... heheh..

 

[Pura Vida]

I saw that too...$3.11 gain in one day and had to say, WTF??

With profits a bit down, how could this happen? Anybody have a rational thought regarding today's price run-up?

 

[nimtz]

I saw that too...$3.11 gain in one day and had to say, WTF??

With profits a bit down, how could this happen? Anybody have a rational thought regarding today's price run-up?

I think the dip in profits was somewhat anticipated with the price of oil being what is has been. My money is on the Street being very impressed that JB lowered their costs in the past quarter. I have to admit so am I. All the negative future arguements for Blue seem to be disappearing.

 

[Dizel8]

Great company, I am slightly biased, but as for this stock in particular and the stockmarket in general, seems like a knowledge of the black arts is required. Many times it seems, regardless of company news or not, the market makes itself.
I am sure come tomorrow, the stock will be going down and every one will be saying the sky is falling.

 

[wndshr]

i am no expert, but aren't investors "supposed" to BUY on "bad" news and SELL on good news?

the way the papers were covering JBLU you would think they were headed in the same direction as the legacy carriers....