JetBlue Reports Wider 3Q Loss, Higher Revenue as Fuel Costs Rise

What happened

JetBlue reported a third-quarter loss of $257 million, or 68 cents a share, wider than last year's $143 million loss. Revenue rose 21% to $2.81 billion. Its average fuel price jumped 57% to $3.91 a gallon.

Confirmed

Global impact / market context

JetBlue is losing more money even as revenue grows, because fuel costs, which means what the airline pays for jet fuel, rose sharply. That squeezes cash available to repay debt and fund operations, a concern for creditors.

Confirmed

JetBlue's stock fell to an all-time low as creditors hired advisers, a sign some lenders doubt full repayment. The stock later rose in after-hours trading. Higher fuel prices raise airline costs industry-wide, pressuring profit per sale and cash available.

Analyst inference

What to watch

1. JetBlue's chief financial officer expects further margin expansion in the fourth quarter, which means profit per sale improving, despite fuel prices forecast to be 85% higher than a year earlier. Confirmed
2. A group of JetBlue's senior creditors hired a financial adviser and law firm, a common step when creditors see risk that a debtor might not fully repay loans on time. Confirmed
3. Watch whether JetBlue raises new financing or cuts capital spending on planes and routes, since the company says it has financing options to bridge to at least $1 EPS and positive free cash flow. Analyst inference

Evidence

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