JetBlue reports record net income for 3Q 2013

NEW YORK, Oct. 29, 2013 /PRNewswire/ — JetBlue Airways Corporation (NASDAQ: JBLU) today reported its results for the third quarter 2013:

Operating income for the quarter was $152 million, resulting in a 10.5% operating margin. This compares to operating income of $113 million and an 8.6% operating margin in the third quarter of 2012.
Pre-tax income for the quarter was $119 million. This compares to pre-tax income of $73 million in the third quarter of 2012.
Net income for the third quarter was $71 million, or $0.21 per diluted share. This compares to JetBlue’s third quarter 2012 net income of $45 million, or $0.14 per diluted share.
“We are pleased to report our highest ever quarterly earnings and our fourteenth consecutive quarter of profitability,” said Dave Barger, JetBlue’s CEO. “These results reflect the success of our network strategy in high value geography and our focus on offering customers a differentiated product while maintaining competitive costs. I would like to thank our 15,000 crewmembers for their hard work and continued dedication to serving our 30 million customers.”

Operational Performance

JetBlue reported record third quarter operating revenues of $1.4 billion. Revenue passenger miles for the third quarter increased 5.4% to 9.56 billion on a capacity increase of 5.1%, resulting in a third quarter load factor of 85.0%, an increase of 0.2 points year over year.

Yield per passenger mile in the third quarter was 13.83 cents, up 5.1% compared to the third quarter of 2012. Passenger revenue per available seat mile (PRASM) for the third quarter 2013 increased 5.4% year over year to 11.75 cents and operating revenue per available seat mile (RASM) increased 5.0% year over year to 12.82 cents.

“Our record revenue results demonstrate the strength of our network in our hometown of New York and throughout the rest of our core network,” said Robin Hayes, JetBlue’s Chief Commercial Officer. “We are also very pleased with the success of our focused growth strategy in Boston, Fort Lauderdale and the Caribbean & Latin America. The combination of our strong brand and unique JetBlue Experience once again allowed JetBlue to generate a revenue premium versus our competitors in many of our key markets.”

Operating expenses for the quarter increased 8.1%, or $95 million, over the prior year period. JetBlue’s operating expense per available seat mile (CASM) for the third quarter increased 2.8% year over year to 11.47 cents. Excluding fuel and profit sharing, CASM increased 4.9% to 6.95 cents.

Fuel Expense and Hedging

JetBlue continued to hedge fuel to manage price volatility. During the third quarter JetBlue hedged approximately 29% of its fuel consumption and managed approximately 14% of its fuel consumption using fixed forward price agreements (FFPs), resulting in a realized fuel price of $3.14 per gallon, a 1.1% decrease over third quarter 2012 realized fuel price of $3.17. JetBlue recorded $3 million in losses on fuel hedges that settled during the third quarter.

JetBlue has managed approximately 39% of its fourth quarter projected fuel requirements using a combination of FFPs, collars, swaps and call options. Based on the fuel curve as of October 24th, JetBlue expects an average price per gallon of fuel, including the impact of hedges, FFPs and fuel taxes, of $3.03 in the fourth quarter.

Balance Sheet Update

JetBlue ended the third quarter with approximately $954 million in unrestricted cash and short term investments. In addition, JetBlue maintains a $200 million line of credit and a revolving credit facility for up to $350 million.

“We remain focused on strengthening the balance sheet,” said Mark Powers, JetBlue’s Chief Financial Officer. “We believe strong cash from operations will allow us to continue to grow sustainably as we increase our asset base and continue paying down debt, enhancing long term shareholder value.”

Fourth Quarter and Full Year Outlook

For the fourth quarter of 2013, CASM is expected to be between negative 1.0% and positive 1.0% compared to the year-ago period. Excluding fuel and profit sharing, CASM in the fourth quarter is expected to be between negative 0.5% and positive 1.5% year over year.

CASM for the full year is expected to increase between 1.0% and 3.0% over full year 2012. Excluding fuel and profit sharing, CASM in 2013 is expected to increase between 2.5% and 4.5% year over year.

Capacity is expected to increase between 7.0% and 9.0% in the fourth quarter and to increase between 5.5% and 7.5% for the full year.

JetBlue will conduct a conference call to discuss its quarterly earnings today, October 29, 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.