JetBlue shares rallied a whopping 25% after the airline reported better-than-expected revenue. Could this have been the turnaround everyone was waiting for – or can you still catch a ride?
JetBlue CEO David Barger said he sees a strong revenue environment forecast for the airlines going forward and JetBlue’s gains – the company announced 2007 was its first profitable year since 2004 – are thanks to the company learning how to manage effectively in a high oil cost environment.
On the subject of oil, Barger said 35% of the company’s fuel costs are hedged and it plans on hedging further in the future whenever the opportunity arises.
Barger also noted that operating margins are actually expected to rise in the back end of 2008, thanks in part to a “difficult operating environment” in the first quarter year-over-year. He also expects new synergies now that the Lufthansa deal has closed. The German flag carrier bought a 19% stake in JetBlue for $300 late last year.
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Trader disclosure: On Jan 29, 2008, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Macke Owns (DIS), (YHOO), (EMC): Najarian Owns (BIIB), (C), (CSCO), (ETFC), (MS), (MSFT), (MCD), (XLF); Najarian Owns (WEN) Calls, (AAPL) Calls, (YHOO) Calls, (EBAY) Calls; Finerman Owns (GS); Finerman's Firm Owns (TSO), (VLO), (WMT), (YHOO), (SUN); Finerman's Firm Is Short (MDY), (IYR), (IJR), (SPY), (CLWR), Finerman's Firm Is Short (LEH) And Owns (LEH) Puts