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JetBlue Continues to Post Strong Operating Results

Santiago Solari

Hedge Funds Bet Big on JetBlue Airways

(Continued from Prior Part)

Impressive June traffic numbers

JetBlue Airways (JBLU) posted strong operational results for June 2015, with an 8.8% year-over-year (or YoY) growth in traffic (revenue passenger miles) and an 8.0% increase in capacity (available seat miles). The higher growth in traffic compared with capacity resulted in an improvement of 60 basis points in load factor (revenue passenger miles to available seat miles).

JetBlue’s operating results ranked behind the only regional airline operator, Hawaiian Holdings (HA), which posted an increase of 100 basis points in load factor. JBLU’s operating performance for June was tied with SkyWest (SKYW). However, JetBlue’s performance beat the big four carriers: American Airlines Group (AAL), Delta Air Lines (DAL), Southwest Airlines (LUV), and United Continental Holdings (UAL).

JBLU forms 1.05% of the iShares US Transportation ETF (IYT). Since the announcement of the traffic results on July 13, JetBlue’s stock has soared by 5.1% to $22.80.

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Solid 1Q15 performance

Despite challenging weather conditions, JetBlue Airways posted healthy results in the first quarter. Its 1Q15 performance was characterized by double-digit growth in revenues to $1.5 billion from $1.3 billion for the same period last year.

The revenue growth, coupled with a reduction in fuel-related expenses, resulted in a substantial improvement in net earnings of $137 million versus $4 million from a year ago. Diluted earnings per share (or EPS) for 1Q15 was $0.40, compared with $0.01 in 1Q14.

Analyst estimates for 2Q15

For the second quarter of 2015, analysts estimate JetBlue’s sales to grow by 7.56% to $1.606 billion, compared with $1.49 billion in 2Q14. The company’s operating profit is expected to grow by 106% to $290.75 million. Its net income is expected to increase by 155% to $155.89 million. The company’s 2Q15 EPS is expected to grow by 139% to $0.456, compared with $0.19 in 2Q14.

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