BigMotorToter
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JetBlue Announces Second Quarter ResultsNEW YORK, July 23 /PRNewswire-FirstCall/ -- JetBlue Airways Corporation (Nasdaq: JBLU) today reported its results for the second quarter 2009:
-- Operating income for the quarter was $76 million, resulting in a 9.4% operating margin, compared to operating income of $21 million and a 2.4% operating margin in the second quarter of 2008. -- Pre-tax income for the quarter was $36 million, which includes an accounting gain of $6 million related to the valuation of JetBlue's auction rate securities. Excluding this accounting gain, JetBlue's pre-tax income for the quarter would have been $30 million. This compares to a pre-tax loss of $13 million in the second quarter of 2008.
-- Net income for the second quarter was $20 million, or $0.07 per diluted share. Excluding the accounting gain, JetBlue's net income for the quarter would have been $14 million, or $0.05 per diluted share. This compares to JetBlue's second quarter 2008 net loss of $9 million, or $0.04 per diluted share."We are pleased to report our second consecutive quarterly profit against the backdrop of a very difficult economic environment," said Dave Barger, JetBlue's CEO. "These results would not have been possible without the efforts of JetBlue's outstanding crewmembers, who continue to be recognized with awards for exceptional customer service. We believe our strong brand, unique value proposition and ongoing focus on maintaining financial strength will position us for continued success in this recessionary environment. Despite a challenging revenue outlook, we continue to expect to generate a profit every quarter this year."
Operational Performance
Operating revenues for the quarter totaled $807 million, representing a decline of 6.0% over the second quarter of 2008. Revenue passenger miles for the second quarter decreased 3.1% to 6.5 billion on a 1.7% decline in capacity, resulting in a second quarter load factor of 79.5%, a decrease of 1.1 points year over year.
Yield per passenger mile in the second quarter was 11.02 cents, down 4.4% compared to the second quarter of 2008. Passenger revenue per available seat mile (PRASM) for the second quarter 2009 decreased 5.7% on a year over year basis to 8.76 cents and operating revenue per available seat mile (RASM) decreased 4.4% year-over-year to 9.80 cents.
Operating expenses for the quarter decreased 12.7%, or $107 million, over the prior year period. JetBlue's operating expense per available seat mile (CASM) for the second quarter decreased 11.2% year-over-year to 8.88 cents. Excluding fuel, CASM increased 9.6% to 6.12 cents.
Fuel Expense and Hedging
During the second quarter, approximately 9% of JetBlue's fuel consumption was hedged. As a result, JetBlue's realized fuel price in the second quarter was $1.97 per gallon, a 37.9% decrease over second quarter 2008 realized fuel price of $3.17. JetBlue realized $42 million in fuel hedging losses during the quarter related to hedge positions it entered into in 2008.
JetBlue continued to realize significant cash savings from lower fuel prices during the quarter as a result of restructuring its fuel hedge portfolio last year. At the end of the quarter, JetBlue had posted approximately $14 million in cash collateral with fuel hedge counterparties related to its remaining 2009 fuel hedge contracts.
During the second quarter, JetBlue began to rebuild its 2009 and 2010 fuel hedge portfolio with the addition of crude oil call options and heating oil collar contracts. JetBlue has hedged approximately 9% of its third quarter estimated fuel consumption, 22% of its fourth quarter estimated fuel consumption and 15% of its 2010 estimated fuel consumption with a combination of crude call options and heating oil collars.
JetBlue expects an average price per gallon of fuel, including the impact of hedges, of $2.03 in the third quarter and $1.97 for the full year 2009.
Balance Sheet Update
JetBlue ended the second quarter with approximately $880 million in cash and cash equivalents. This cash balance excludes an $84 million line of credit, which JetBlue paid down to zero during the quarter.
In addition, JetBlue had $227 million of auction rate securities, net of unrealized losses, at the end of the quarter. JetBlue recorded a $6 million accounting gain in the second quarter related to the valuation of some of its auction rate securities. The accompanying financial tables contain further information regarding this gain.
During the second quarter, JetBlue raised approximately $300 million in net proceeds from an equity issuance and convertible debt offering. "JetBlue's ability to access the capital markets, along with our continued focus on liquidity, has helped increase our financial flexibility," said Ed Barnes, JetBlue's CFO. "We believe this flexibility will position us to take advantage of the eventual economic recovery."
Third Quarter and Full Year Outlook
Looking ahead, for the third quarter of 2009, JetBlue expects to report an operating margin between six and eight percent. Pre-tax margin for the quarter is expected to be between negative one and one percent. PRASM is expected to decrease between eight and 11 percent year over year. RASM is expected to decrease between seven and ten percent year over year. CASM is expected to decrease between 12 and 14 percent over the year-ago period. Excluding fuel, CASM in the third quarter is expected to increase between nine and 11 percent year over year. Capacity is expected to increase between one and three percent in the third quarter and stage length is expected to decrease roughly five percent over the same period last year.
For the full year 2009, JetBlue expects to report an operating margin between eight and ten percent. Pre-tax margin for the full year is expected to be between two and four percent. PRASM for the full year is expected to decrease between four and seven percent year over year. RASM for the full year is expected to decrease between two and five percent year over year. CASM for the full year is expected to decrease between eight and ten percent over full year 2008. Excluding fuel, CASM in 2009 is expected to increase between eight and ten percent year over year. Capacity for the full year 2009 is expected to be in a range of negative one to positive one percent compared to 2008 and stage length is expected to decrease about four percent over full year 2008.
JetBlue will conduct a conference call to discuss its quarterly earnings today, July 23, at 10:00 a.m. Eastern Time. A live broadcast of the conference call will be available via the internet at http://investor.jetblue.com.
-- Operating income for the quarter was $76 million, resulting in a 9.4% operating margin, compared to operating income of $21 million and a 2.4% operating margin in the second quarter of 2008. -- Pre-tax income for the quarter was $36 million, which includes an accounting gain of $6 million related to the valuation of JetBlue's auction rate securities. Excluding this accounting gain, JetBlue's pre-tax income for the quarter would have been $30 million. This compares to a pre-tax loss of $13 million in the second quarter of 2008.
-- Net income for the second quarter was $20 million, or $0.07 per diluted share. Excluding the accounting gain, JetBlue's net income for the quarter would have been $14 million, or $0.05 per diluted share. This compares to JetBlue's second quarter 2008 net loss of $9 million, or $0.04 per diluted share."We are pleased to report our second consecutive quarterly profit against the backdrop of a very difficult economic environment," said Dave Barger, JetBlue's CEO. "These results would not have been possible without the efforts of JetBlue's outstanding crewmembers, who continue to be recognized with awards for exceptional customer service. We believe our strong brand, unique value proposition and ongoing focus on maintaining financial strength will position us for continued success in this recessionary environment. Despite a challenging revenue outlook, we continue to expect to generate a profit every quarter this year."
Operational Performance
Operating revenues for the quarter totaled $807 million, representing a decline of 6.0% over the second quarter of 2008. Revenue passenger miles for the second quarter decreased 3.1% to 6.5 billion on a 1.7% decline in capacity, resulting in a second quarter load factor of 79.5%, a decrease of 1.1 points year over year.
Yield per passenger mile in the second quarter was 11.02 cents, down 4.4% compared to the second quarter of 2008. Passenger revenue per available seat mile (PRASM) for the second quarter 2009 decreased 5.7% on a year over year basis to 8.76 cents and operating revenue per available seat mile (RASM) decreased 4.4% year-over-year to 9.80 cents.
Operating expenses for the quarter decreased 12.7%, or $107 million, over the prior year period. JetBlue's operating expense per available seat mile (CASM) for the second quarter decreased 11.2% year-over-year to 8.88 cents. Excluding fuel, CASM increased 9.6% to 6.12 cents.
Fuel Expense and Hedging
During the second quarter, approximately 9% of JetBlue's fuel consumption was hedged. As a result, JetBlue's realized fuel price in the second quarter was $1.97 per gallon, a 37.9% decrease over second quarter 2008 realized fuel price of $3.17. JetBlue realized $42 million in fuel hedging losses during the quarter related to hedge positions it entered into in 2008.
JetBlue continued to realize significant cash savings from lower fuel prices during the quarter as a result of restructuring its fuel hedge portfolio last year. At the end of the quarter, JetBlue had posted approximately $14 million in cash collateral with fuel hedge counterparties related to its remaining 2009 fuel hedge contracts.
During the second quarter, JetBlue began to rebuild its 2009 and 2010 fuel hedge portfolio with the addition of crude oil call options and heating oil collar contracts. JetBlue has hedged approximately 9% of its third quarter estimated fuel consumption, 22% of its fourth quarter estimated fuel consumption and 15% of its 2010 estimated fuel consumption with a combination of crude call options and heating oil collars.
JetBlue expects an average price per gallon of fuel, including the impact of hedges, of $2.03 in the third quarter and $1.97 for the full year 2009.
Balance Sheet Update
JetBlue ended the second quarter with approximately $880 million in cash and cash equivalents. This cash balance excludes an $84 million line of credit, which JetBlue paid down to zero during the quarter.
In addition, JetBlue had $227 million of auction rate securities, net of unrealized losses, at the end of the quarter. JetBlue recorded a $6 million accounting gain in the second quarter related to the valuation of some of its auction rate securities. The accompanying financial tables contain further information regarding this gain.
During the second quarter, JetBlue raised approximately $300 million in net proceeds from an equity issuance and convertible debt offering. "JetBlue's ability to access the capital markets, along with our continued focus on liquidity, has helped increase our financial flexibility," said Ed Barnes, JetBlue's CFO. "We believe this flexibility will position us to take advantage of the eventual economic recovery."
Third Quarter and Full Year Outlook
Looking ahead, for the third quarter of 2009, JetBlue expects to report an operating margin between six and eight percent. Pre-tax margin for the quarter is expected to be between negative one and one percent. PRASM is expected to decrease between eight and 11 percent year over year. RASM is expected to decrease between seven and ten percent year over year. CASM is expected to decrease between 12 and 14 percent over the year-ago period. Excluding fuel, CASM in the third quarter is expected to increase between nine and 11 percent year over year. Capacity is expected to increase between one and three percent in the third quarter and stage length is expected to decrease roughly five percent over the same period last year.
For the full year 2009, JetBlue expects to report an operating margin between eight and ten percent. Pre-tax margin for the full year is expected to be between two and four percent. PRASM for the full year is expected to decrease between four and seven percent year over year. RASM for the full year is expected to decrease between two and five percent year over year. CASM for the full year is expected to decrease between eight and ten percent over full year 2008. Excluding fuel, CASM in 2009 is expected to increase between eight and ten percent year over year. Capacity for the full year 2009 is expected to be in a range of negative one to positive one percent compared to 2008 and stage length is expected to decrease about four percent over full year 2008.
JetBlue will conduct a conference call to discuss its quarterly earnings today, July 23, at 10:00 a.m. Eastern Time. A live broadcast of the conference call will be available via the internet at http://investor.jetblue.com.
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