JetBlue Airways (JBLU) Tops Q1 EPS by 21c

JetBlue Airways (NASDAQ: JBLU) reported Q1 EPS of ($1.48), $0.21 better than the analyst estimate of ($1.69). Revenue for the quarter came in at $733 million versus the consensus estimate of $682.79 million.

Our Recovery Plan and Actions Taken to Position JetBlue for Future Success

“Although our EPS remains in negative territory, we have seen meaningful progress in the demand recovery, and have started to gain momentum from the groundwork we have laid to emerge from the crisis as a stronger JetBlue,” said Robin Hayes, JetBlue’s Chief Executive Officer.

“Looking back to our work from 2020, I could not be more confident in our future. Our teams continue executing our comprehensive recovery plan, reducing our cash burn, rebuilding our margins, and repairing our balance sheet. We have seen positive cash from operations for March, and this milestone is our first step towards achieving positive EBITDA and returning to profitability.”

Action Plan, Revenue and Capacity

“While we initially anticipated trends improving during the quarter, we saw a bigger than expected step up in demand for leisure travel beginning in mid-February,” said Joanna Geraghty, JetBlue’s President and Chief Operating Officer.

“For the second quarter of 2021, our planning assumption for revenue is a decline of between (30%) and (35%) year over two, the largest sequential improvement in our revenue since the start of the pandemic. We expect unit revenue to significantly improve, driven by both increasing load factors and improving yields.

“During the pandemic we have been focused on balancing supply and demand, managing our capacity to maximize revenue and rebuild our margins. For the second quarter of 2021, our planning assumption is for capacity to decline approximately (15%) year over two, given the strong sequential improvement in demand.”

Financial Performance and Outlook

“In March we reached breakeven cash from operations and our first quarter Adjusted EBITDA(1) was ahead of the range we anticipated, a result of improving revenue trends and continuing to successfully manage our cost structure, despite increasing fuel prices,” said Steve Priest, JetBlue’s Chief Financial Officer.

“For the second quarter, we estimate EBITDA will range between ($100) and ($200) million (2), reflecting an acceleration of demand, partly offset by cost pressures from fuel prices, and airport rents and landing fees. On an EBITDA basis, we believe we will reach breakeven in the third quarter, and expect to remain in positive territory through the end of the year.

“Since the start of the pandemic, we have gone deep on our cost structure with a focus on our fixed cost base, adding to the continued momentum from our Structural Cost Program. We expect to achieve better than 2019 CASM ex-fuel in 2022, providing a path to expand our EBITDA and ultimately, our pre-tax margins.

“Going forward, as we produce positive cash from operations, we plan to prioritize paying down high cost debt. We also intend to continue to take a strategic and measured approach to return to investment grade metrics and a debt to cap ratio between 30% and 40%.”

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