JetBlue Stock Jumps 18% as Outlook Soothes Bond Fears — SkimNews
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- JetBlue stock jumped 18% on Tuesday after hitting a new low on Monday, as the carrier's upbeat forecast calmed a selloff triggered by a Wall Street Journal report that a group of senior creditors was working with restructuring adviser PJT Partners.
- Joanna Geraghty said the airline has "no intention, no plans" to file for bankruptcy and is not engaged with any restructuring company, pointing to a "fundamental disconnect" between the narrative in the bond market and what its financial results actually demonstrate.
- JetBlue posted a third-quarter net loss of $257 million for the three months ended Sept. 30, wider than $143 million a year earlier; adjusted loss per share was 60 cents versus the 55 cents expected, and revenue of $2.81 billion just missed the $2.82 billion estimate. The carrier has not posted an annual profit since 2019.
- JetBlue's fuel bill rose 61% to $868 million in the quarter, while average fares climbed more than 19% to $245.11 from $205.67 and the carrier said travel demand remained strong; its turnaround plan includes investing in premium seats, with a new domestic first class section recently put on sale.
- Revenue per available seat mile, the airline's key operating metric, is expected to be up as much as 22% in the fourth quarter, putting the full-year increase at 13.5% to 14.5%, while capacity growth is capped at no more than 4% in the current quarter.
- JetBlue's balance sheet ended the quarter with $2.2 billion in liquidity and a $7 billion unencumbered asset base including $2.8 billion in aircraft and engines, against $8.4 billion of total debt as of Sept. 30; CFO Ursula Hurley says that provides a "strong bridge" to at least $1 EPS and positive free cash flow in 2028.
- Fort Lauderdale-Hollywood International Airport is where JetBlue is expanding, the former home hub of Spirit Airlines, which collapsed in May; a federal judge blocked JetBlue's Spirit acquisition and its regional partnership with American Airlines, leaving a partnership with United Airlines.
Why it matters: An 18% jump after a new low shows investors are trading on JetBlue's fourth-quarter revenue-per-seat-mile guide of up to 22%, not on the $257 million quarterly loss. But the Monday selloff followed a report that senior creditors were working with PJT Partners, an overhang sitting against $8.4 billion of debt and $2.2 billion in liquidity.
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