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JetBlue Swings to Profit, Lowers First-Quarter Guidance

CNBC.com
Tuesday, 30 Jan 2007 | 10:40 AM ET

JetBlue Airways forecast a loss in the first quarter on rising costs, after higher fares helped the budget carrier post a profit in the fourth quarter.

The seven-year-old airline, seeking to control costs, has reined them in by delaying deliveries of some aircraft and selling others. It has also raised fares at the expense of filling seats as it seeks to improve earnings.

These efforts helped JetBlue return to profit in the fourth quarter. But the results were slightly below analyst expectations, and JetBlue's shares fell Tuesday.

JetBlue, the No. 8 U.S. carrier by passenger traffic, posted a net profit of $17 million, or 10 cents a share, compared with a loss of $42 million, 25 cents a share.

The low-cost airline had been expected to post fourth-quarter earnings of 11 cents a share, according to a Thomson Financial consensus estimate, up from a loss of 19 cents a share last year.

Operating revenue jumped 42% to $633 million on a 14.5% rise in capacity and higher fares. Yield per passenger mile, a reflection of average ticket prices, rose 25% in the quarter.

The higher fares dented demand. Load factor -- a measure of the percentage of seats filled by paying passengers -- fell 1.4 points to 79.7%.

Despite the improvement last quarter, JetBlue guided toward a loss in the first quarter, forecasting a pretax margin of negative 4% to negative 2%. It said unit costs were expected to rise 6% to 8%.

Analysts expected JetBlue to post a profit of 9 cents a share in the first quarter, on average.

But the New York-based carrier expects a profit for the year, forecasting a pretax margin of 5% to 7%.

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