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JetBlue shares rally after airline flags 'disconnect' between earnings and bond rout
Reuters • • business
Key Points:
- JetBlue advanced its third-quarter earnings release amid a bond sell-off that caused its shares to drop 10%, with short interest in the stock at 25%.
- Despite market concerns, CEO Joanna Geraghty emphasized the company's strong liquidity and confidence in achieving its $1 EPS target by 2028, even with volatile fuel prices.
- The airline raised its full-year seat revenue growth forecast to 13.5%-14.5%, driven by strong fares, resilient demand, and growth in Fort Lauderdale, marking four consecutive quarters of year-over-year seat revenue improvement.
- JetBlue ended the quarter with $2.2 billion in liquidity and $7 billion in unencumbered assets, providing financial flexibility to manage prolonged high fuel costs, which remain a significant challenge.
- Fuel costs rose sharply, with JetBlue paying $3.91 per gallon in Q3, increasing margin pressure despite fare hikes, contributing to a 48% decline in share value and making it the worst-performing US carrier this year.
