Q3 Earnings Preview for JetBlue Airways (NasdaqGS:JBLU)

in EARNINGS/INVESTING IDEAS by

JetBlue Airways Corporation (NasdaqGS:JBLU) is scheduled to report Q3 earnings results on October 27, 2020.

The company is expected to report earnings of -$1.95/share on revenue of $478.3 million. The consensus earnings per share (EPS) of -$1.95/share is based on a poll of 16 analysts and represents a decline in eps of −430.4% over the same quarter last year, when the company reported earnings of $0.59/share.

The revenue forecast of $478.3 million based on a poll of 13 analysts implies a year-over-year (YoY) decline in revenue of −77.1%. Last year the company reported $2.086 billion in revenue for the quarter.

Expected to report EPS of -$1.95/share for Q3, 2020
Metric Expected Prior Year YoY Change
Revenue $478.34 $2,086.00 −77.1%
EPS -$1.95 $0.59 −430.4%

Earnings Call Trends

Historically, management has exceeded analyst expectations 7 out of the last 8 tracked quarters, and missed expectations 1 quarter.

What are your expectations from JetBlue Airways Corporation for earnings this quarter? Let us know in the comments!

Analyst Expected vs. Reported EPS
Quarter Expected Reported Surprise Result
Q2, 2020 -$1.97 -$2.02 -2.5% Missed
Q1, 2020 -$0.43 -$0.42 1.3% Beat
Q4, 2019 $0.55 $0.56 2.5% Beat
Q3, 2019 $0.51 $0.59 15.6% Beat
Q2, 2019 $0.57 $0.60 5.7% Beat
Q1, 2019 $0.12 $0.16 29.2% Beat
Q4, 2018 $0.43 $0.50 16.6% Beat
Q3, 2018 $0.42 $0.43 1.7% Beat

In the following table, we summarize the company’s stock price movements after earnings releases. The “Price Day Prior” column shows the closing stock price on the day before the earnings report, and the “Price Next Day” column shows the stock price at the end of the trading day after the earnings report. After the last earnings report for the period ending June 30, 2020, the stock price reacted by falling −2.7%.

Stock Price Performance After Earnings
Report Date Price Day Prior Price Next Day Change % Result
July 28, 2020 $10.22 $9.95 −2.7% Decline
May 7, 2020 $8.02 $9.09 13.3% Increase
January 23, 2020 $19.80 $20.64 4.3% Increase
October 22, 2019 $17.52 $18.88 7.8% Increase

The other question to consider is one of earnings manipulation. There is a lot of pressure on management each quarter to deliver on earnings expectations. The Beneish M-Score is a statistical model that provides some insight into whether the company might be manipulating earnings. With a Beneish M-Score of −3.44, the model suggests that the company is not likely to be an earnings manipulator. A value of −3.44 implies a 0.0% chance of earnings manipulation.

Fundamentals And Technical Analysis

JetBlue Airways Corporation is currently trading at $12.30/share, up 0.3% for the day. The company is trading at approximately 56.8% of its 52-week high of $21.65/share. The company’s stock price is up 23.6% since the last earnings report and up 0.0% over the previous week.

The company’s 14 Day Relative Price Index (RSI) of 53.06 suggests the company is trading in technically neutral territory. The RSI is considered overbought when above 70 and oversold when below 30.


NasdaqGS:JBLU Stock Price Chart
Source: Finbox

The current share price implies a price-to-earnings (P/E) multiple of −13.96 and a forward P/E multiple of −2.05.

JetBlue Airways Corporation’s current share price also implies a price-to-book (P/B) multiple of 0.82. The following table summarizes some other key fundamental ratios:

Data as of October 21, 2020
Metric Value
Last Reported Fiscal Period Key FY2020.Q2
Period End Date June 30, 2020
Stock Price (Current) $12.30
P/E Ratio −14.0x
P/E Ratio (Fwd) −2.1x
PEG Ratio 0.1
Total Debt / Total Capital 62.5%
Levered Free Cash Flow -$416 million
EV / EBITDA 45.9x

Finbox

JetBlue Airways Corporation is a mid-cap stock with a market capitalization of $3.351 billion and a total enterprise value of $6.006 billion. The company operates in the Industrials sector and the Airlines industry.

JetBlue Airways Corporation, a passenger carrier company, provides air transportation services. As of December 31, 2019, the company operated a fleet of 63 Airbus A321 aircraft, 6 Airbus A321 neo aircraft, 130 Airbus A320 aircraft, and 60 Embraer E190 aircraft. It also served 99 destinations in the 30 states in the United States, the District of Columbia, the Commonwealth of Puerto Rico, the U.S. Virgin Islands, and 21 countries in the Caribbean and Latin America. JetBlue Airways Corporation has a strategic partnership with American Airlines Group Inc. to create connectivity for travelers in the Northeast. The company was founded in 1998 and is based in Long Island City, New York.

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