JetBlue Profit Doubles on Cheap Fuel

JetBlue Airways Corp. reported its profit more than doubled in the final quarter of the year, handily beating Wall Street expectations as the airline soars above its peers on cheap fuel and better-than-expected revenue performance.

Shares of the company, which have risen 35% over the past 12 months, got another 3.5% lift premarket to $22.

For the quarter, fuel costs tumbled 31% to $300 million. JetBlue reported it had hedges in place for about 14% of its fuel consumption, driving the average price of fuel down 38% to $1.68 a gallon versus $2.70 in the quarter last year. The airline recorded $33 million in losses on fuel hedges settling during the fourth quarter.

The company said it has no hedges in place for the first and second quarters of 2016 and expects fuel at an average of $1.12 a gallon in the first quarter.

Severe winter weather spurred a jump in flight cancellations in the first quarter of 2015, increasing JetBlue's 2016 capacity growth rate by about 2.5% in the first quarter and 0.5% for the full year. The airline said it expects capacity to increase 14% to 16% in the first quarter and 8.5% to 10.5% for the year.

Capacity is a closely watched metric in the airline sector because of concerns that airlines may be making too many seats available. The airline said the outlook doesn't include the impact of last weekend's snowstorm that hit the northeast U.S. and caused more than 900 cancellations last week.

But Chief Executive Robin Hayes pointed to above-industry average revenue performance.

JetBlue's unit revenue—the amount it takes in per seat flown a mile—fell 3.6% in the quarter compared with a year ago. Traffic jumped 12.4% in the quarter while capacity rose 10.4%, pushing load factor, or the percentage of seats filled, 1.5 points to 83.6%.

The company posted a profit of $190 million, or 56 cents a share, up from $88 million, or 26 cents a share, a year earlier. Revenue climbed 10% to $1.59 billion.

Analysts surveyed by Thomson Reuters forecast per-share earnings of 51 cents a share on revenue of $1.58 billion.

Write to Anne Steele at [e-mail]

(END) Dow Jones Newswires

January 28, 2016 09:15 ET (14:15 GMT)

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