Jetblue Announces First Quarter Results
April 24 2014 - 7:30AM
Marketwired Canada
JetBlue Airways Corporation (NASDAQ: JBLU) today reported its results for the
first quarter 2014:
-- Operating income of $41 million in the first quarter. This compares to
operating income of $59 million in the first quarter of 2013.
-- Pre-tax income of $6 million in the first quarter. This compares to pre-
tax income of $23 million in the first quarter of 2013.
-- Net income for the first quarter was $4 million, or $0.01 per diluted
share. This compares to JetBlue's first quarter 2013 net income of $14
million, or $0.05 per diluted share.
"Today, we reported our sixteenth consecutive quarter of profitability," said
Dave Barger, JetBlue's Chief Executive Officer. "While first quarter results
were negatively impacted by severe winter weather in the Northeast, we believe
our maturing network in high-value geography together with our differentiated
product and service will help JetBlue expand margins and improve shareholder
returns in 2014."
Operational Performance
JetBlue reported record first quarter operating revenues of $1.3 billion despite
severe winter weather in the Northeast. JetBlue cancelled 4,100 flights during
the quarter, which reduced revenue by an estimated $50 million and reduced
operating income by approximately $35 million. Revenue passenger miles for the
first quarter increased 1.8% to 8.7 billion on a capacity increase of 2.7%,
resulting in a first quarter load factor of 83.1%, a decrease of 0.8 points year
over year.
Yield per passenger mile in the first quarter was 14.20 cents, up 1.8% compared
to the first quarter of 2013. Passenger revenue per available seat mile (PRASM)
for the first quarter 2014 increased 0.9% year over year to 11.80 cents and
operating revenue per available seat mile (RASM) increased 1.1% year over year
to 12.95 cents. The shift of the Easter and Passover holidays from March last
year to April this year negatively impacted first quarter year over year PRASM
by approximately three points.
"We achieved year over year improvements in yield and fare while growing
capacity -- demonstrating the core strength of our business," said Robin Hayes,
JetBlue's President. "With a solid demand environment and continued focus on
ancillary revenue initiatives, we expect year over year unit revenue growth to
accelerate in the second quarter."
Operating expenses for the quarter increased 5.5%, or $68 million, over the
prior year period. Interest expense for the quarter declined 8.3%, or $4
million, due to JetBlue's focus on debt reduction. JetBlue's operating expense
per available seat mile (CASM) for the first quarter increased 2.6% year over
year to 12.55 cents. Excluding fuel and profit sharing, CASM increased 6.3% to
8.10 cents driven mainly by capacity reductions and higher non-fuel operating
expenses associated with severe winter weather.
Fuel Expense and Hedging
JetBlue continued to hedge fuel to manage price volatility. Specifically, during
the first quarter JetBlue hedged approximately 16% of its fuel consumption and
managed approximately 8% of its fuel consumption using fixed forward price
agreements (FFPs). This resulted in a realized fuel price of $3.14 per gallon, a
4.4% decrease over first quarter 2013 realized fuel price of $3.29. JetBlue
recorded $1 million in losses on fuel hedges that settled during the first
quarter.
JetBlue has managed approximately 22% of its second quarter projected fuel
requirements using a combination of FFPs, jet fuel swaps and caps. Based on the
fuel curve as of April 16th, JetBlue expects an average price per gallon of
fuel, including the impact of hedges, FFPs and fuel taxes, of $3.11 in the
second quarter.
Liquidity and Cash Flow
JetBlue ended the quarter with approximately $771 million in unrestricted cash
and short term investments. In addition, JetBlue maintains $550 million in lines
of credit.
During the first quarter, JetBlue repaid $237 million in debt and capital lease
obligations. JetBlue plans to repay approximately $481 million in debt and
capital lease obligations in 2014, including approximately $48 million in the
second quarter.
JetBlue remains committed to improving its return on invested capital (ROIC) by
an average of one percentage point per year. "We remain focused on growing unit
revenues while maintaining our cost advantage and strengthening the balance
sheet," said Mark Powers, JetBlue's Chief Financial Officer. "To that end, we
plan to use the net proceeds from the pending sale of our wholly-owned
subsidiary LiveTV to prepay debt and for other ROIC-accretive actions."
Second Quarter and Full Year Outlook
For the second quarter of 2014, CASM is expected to be increase between 3.5% and
5.5% versus the year-ago period. Excluding fuel and profit sharing, CASM in the
second quarter is expected to increase between 4.5% and 6.5% year over year.
CASM for the full year is expected to increase between 2.0% and 4.0% over full
year 2013. Excluding fuel and profit sharing, CASM in 2014 is expected to
increase between 3.5% and 5.5% year over year.
JetBlue expects approximately 1.5 points of this year over year unit cost
increase to be driven by capacity reductions resulting from (1) reallocation of
aircraft from longer haul routes to support new service in Washington Reagan
National Airport and (2) first quarter weather-related cancellations.
Capacity is expected to increase between 5.5% and 7.5% in the second quarter.
For the full year, capacity is expected to increase between 4.0% and 6.0%.
JetBlue will conduct a conference call to discuss its quarterly earnings today,
April 24, at 9:30 a.m. Eastern Time. A live broadcast of the conference call
will be available via the internet at http://investor.jetblue.com.
About JetBlue
JetBlue is New York's Hometown Airline™ and a leading carrier in Boston, Fort
Lauderdale/Hollywood, Los Angeles (Long Beach), Orlando and San Juan. JetBlue
carries 30 million customers a year to 85 cities in the U.S., Caribbean and
Latin America with an average of 825 daily flights. JetBlue was the first U.S.
airline to allow customers to use their personal electronic devices throughout
all domestic flights. With JetBlue, all seats are assigned, all fares are
one-way, and an overnight stay is never required. For more information please
visit www.JetBlue.com.
Forward Looking Statements
This press release contains statements of a forward-looking nature which
represent our management's beliefs and assumptions concerning future events.
When used in this document and in documents incorporated herein by reference,
the words "expects," "plans," "anticipates," "indicates," "believes,"
"forecast," "guidance," "outlook," "may," "will," "should," "seeks," "targets"
and similar expressions are intended to identify forward-looking statements.
Forward-looking statements involve risks, uncertainties and assumptions, and are
based on information currently available to us. Actual results may differ
materially from those expressed in the forward-looking statements due to many
factors, including, without limitation, our extremely competitive industry;
volatility in financial and credit markets which could affect our ability to
obtain debt and/or lease financing or to raise funds through debt or equity
issuances; increases and volatility in fuel prices, maintenance costs and
interest rates; our ability to implement our growth strategy; our significant
fixed obligations and substantial indebtedness; our ability to attract and
retain qualified personnel and maintain our culture as we grow; our reliance on
high daily aircraft utilization; our dependence on the New York metropolitan
market and the effect of increased congestion in this market; our reliance on
automated systems and technology; our being subject to potential unionization,
work stoppages, slowdowns or increased labor costs; our reliance on a limited
number of suppliers; our presence in some international emerging markets that
may experience political or economic instability or may subject us to legal
risk; reputational and business risk from information security breaches; changes
in or additional government regulation; changes in our industry due to other
airlines' financial condition; a continuance of the economic recessionary
conditions in the U.S. or a further economic downturn leading to a continuing or
accelerated decrease in demand for domestic and business air travel; and
external geopolitical events and conditions. Further information concerning
these and other factors is contained in the Company's Securities and Exchange
Commission filings, including but not limited to, the Company's 2013 Annual
Report on Form 10-K. We undertake no obligation to update any forward-looking
statements to reflect events or circumstances that may arise after the date of
this release.
Regulation G Reconciliation
Consolidated operating cost per available seat mile, excluding fuel and profit
sharing (CASM Ex-Fuel and Profit Sharing) is a non-GAAP financial measure that
we use as a measure of our performance.
CASM is a common metric used in the airline industry. We exclude aircraft fuel
and related taxes and profit sharing from operating cost per available seat mile
to determine CASM Ex-Fuel and Profit Sharing. We believe that CASM Ex-Fuel and
Profit sharing provides investors the ability to measure financial performance
excluding items beyond our control, such as (i) fuel costs, which are subject to
many economic and political factors beyond our control, and (ii) profit sharing,
which is sensitive to volatility in earnings. We believe this measure is more
indicative of our ability to manage costs and is more comparable to measures
reported by other major airlines. We are unable to reconcile projected CASM
Ex-Fuel and Profit Sharing as the nature or amount of excluded items are only
estimated at this time.
We believe this non-GAAP measure provides a more meaningful comparison of our
results to others in the airline industry and our prior year results. Investors
should consider this non-GAAP financial measure in addition to, and not as a
substitute for, our financial performance measures prepared in accordance with
GAAP. It should be noted as well that our non-GAAP information may be different
from the non-GAAP information provided by other companies.
See "Non GAAP Financial Measure" appearing in the tables following this press
release for reconciliation of this non-GAAP measure to its nearest comparable
GAAP measure.
JETBLUE AIRWAYS CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(in millions, except share and per share amounts)
(unaudited)
Three Months Ended
March 31, Percent
------------------
2014 2013 Change
-------- -------- -------
OPERATING REVENUES
Passenger $ 1,230 $ 1,186 3.6
Other 119 113 5.9
-------- --------
Total operating revenues 1,349 1,299 3.8
OPERATING EXPENSES
Aircraft fuel and related taxes 464 467 (0.8)
Salaries, wages and benefits 329 280 17.7
Landing fees and other rents 77 70 8.7
Depreciation and amortization 78 68 13.8
Aircraft rent 31 32 (3.1)
Sales and marketing 54 50 8.8
Maintenance materials and repairs 94 114 (17.8)
Other operating expenses 181 159 14.7
-------- --------
Total operating expenses 1,308 1,240 5.5
-------- --------
OPERATING INCOME 41 59
Operating margin 3.1% 4.5% (1.4)pts.
OTHER INCOME (EXPENSE)
Interest expense (37) (41) (8.3)
Capitalized interest 3 3 (11.4)
Interest income and other (1) 2 (134.3)
-------- --------
Total other income (expense) (35) (36) (2.6)
INCOME BEFORE INCOME TAXES 6 23
Pre-tax margin 0.5% 1.8% (1.3)pts.
Income tax expense 2 9
-------- --------
NET INCOME $ 4 $ 14
======== ========
EARNINGS PER COMMON SHARE:
Basic $ 0.01 $ 0.05
======== ========
Diluted $ 0.01 $ 0.05
======== ========
Weighted average shares outstanding
(thousands):
Basic 294,826 279,768
Diluted 297,213 308,858
JETBLUE AIRWAYS CORPORATION
COMPARATIVE OPERATING STATISTICS
(unaudited)
Three Months Ended
March 31, Percent
------------------
2014 2013 Change
-------- -------- -------
Revenue passengers (thousands) 7,333 7,300 0.4
Revenue passenger miles (millions) 8,662 8,506 1.8
Available seat miles (ASMs) (millions) 10,419 10,140 2.7
Load factor 83.1% 83.9% (0.8)pts.
Aircraft utilization (hours per day) 11.4 11.9 (3.8)
Average fare $ 167.69 $ 162.53 3.2
Yield per passenger mile (cents) 14.20 13.95 1.8
Passenger revenue per ASM (cents) 11.80 11.70 0.9
Operating revenue per ASM (cents) 12.95 12.81 1.1
Operating expense per ASM (cents) 12.55 12.23 2.6
Operating expense per ASM, excluding fuel
(cents) 8.10 7.62 6.3
Operating expense per ASM, excluding fuel
and profit sharing (cents) (a) 8.10 7.62 6.3
Airline operating expense per ASM (cents)
(b) 12.36 12.06 2.5
Departures 68,152 66,773 2.1
Average stage length (miles) 1,095 1,092 0.3
Average number of operating aircraft during
period 193.0 180.3 7.1
Average fuel cost per gallon, including
fuel taxes $ 3.14 $ 3.29 (4.4)
Fuel gallons consumed (millions) 148 142 3.8
Full-time equivalent employees at period
end (b) 13,042 12,385 5.3
(a) Refer to our "Regulation G Reconciliation" note at the end of our
Earnings Release for more information on this non-GAAP measure.
(b) Excludes operating expenses and employees of LiveTV, LLC, which are
unrelated to our airline operations.
SELECTED CONSOLIDATED BALANCE SHEET DATA
(in millions)
March 31, December 31,
2014 2013
-------------- --------------
(unaudited)
Cash and cash equivalents $ 501 $ 225
Total investment securities 367 516
Total assets 7,645 7,350
Total debt 2,639 2,585
Stockholders' equity 2,136 2,134
SOURCE: JetBlue Airways Corporation
NON-GAAP FINANCIAL MEASURE (a)
RECONCILIATION OF OPERATING EXPENSE PER ASM, EXCLUDING FUEL AND PROFIT
SHARING
(dollars in millions, per ASM data in cents)
(unaudited)
Three Months Ended
March 31,
---------------------------------
2014 2013
---------------- ----------------
$ per ASM $ per ASM
-------- ------- -------- -------
Total operating expenses $ 1,308 12.55 $ 1,240 12.23
Less: Aircraft fuel and related taxes 464 4.45 467 4.61
-------- ------- -------- -------
Operating expenses, excluding fuel 844 8.10 773 7.62
Less: Profit sharing - - - -
-------- ------- -------- -------
Operating expense, excluding fuel and
profit sharing $ 844 8.10 $ 773 7.62
-------- ------- -------- -------
(a) Refer to our "Regulation G Reconciliation" note at the end of our
Earnings Release for more information on this non-GAAP measure.
FOR FURTHER INFORMATION PLEASE CONTACT:
CONTACTS
JetBlue Investor Relations
Tel: +1 718 709 2202
ir@jetblue.com
JetBlue Corporate Communications
Tel: +1 718 709 3089
corpcomm@jetblue.com
JetBlue Airways (NASDAQ:JBLU)
Historical Stock Chart
From Mar 2024 to Apr 2024
JetBlue Airways (NASDAQ:JBLU)
Historical Stock Chart
From Apr 2023 to Apr 2024
