JetBlue throttles back growth; Profits are up, but Forest Hills company plans to sell airplanes, delay fleet expansion to keep itself in check

JetBlue Airways Corp., the popular discount carrier, said yesterday that profits rose in the second quarter, compared with the same period last year, but that it plans to slow its once warp-speed growth.

The Forest Hills-based airline said it earned $21 million in the quarter, up from $14 million in the same period last year. JetBlue said it carried more passengers and flew its planes longer in the second quarter.

But JetBlue missed analysts' expectations. The company said it earned 11 cents a share, compared with 8 cents in the period last year. Wall Street had been expecting 12 cents in the second quarter.

Revenue in the quarter rose to $730 million, from $612 million in the second quarter of 2006, a 19.3 percent increase. The company had forecast a profitable second quarter.

JetBlue's new chief executive, David Barger, has been conducting a review of the airline's operations since he took over in May for founder David Neeleman.

JetBlue said in its earnings announcement that it plans to sell three of its Airbus A320 planes later this year and defer 16 of the new Embraer E-190 airplanes originally scheduled for delivery from 2007 through 2012, to 2013 through 2015.

Robert W. Mann, an independent airline analyst based in Port Washington, said the sale of the Airbuses was expected, but that the deferral of the Embraer airplanes was different.

"That was a bit more of a deferral than I expected, and it suggests they are still not completely satisfied with the reliability of the airplane or perhaps its cost," Mann said. "The presumption was they would be accepting more of these [Embraer] airplanes. But that does not seem to be the case now. This seems to be a follow-through that the company was going to go through a very transparent review."

In a note to clients, James Corridore, who follows the airline industry for Standard & Poor's in Manhattan, said JetBlue is "following the correct strategy, given the challenging domestic environment. Slowing capacity growth will help protect its balance sheet and aid profitability."

The top management changes followed a turbulent period at JetBlue, including an embarrassing meltdown on Valentine's Day, when the airline had to cancel 1,700 flights that day and a few days after because of a severe snow and ice storm in the Northeast.

The mishap forced Neeleman to step down as chief executive. Neeleman is now the airline's nonexecutive chairman. The carrier had cut its full-year profit forecast twice in the first four months of this year.

"Slowing capacity growth will allow us to strengthen our balance sheet and facilitate earnings growth," Barger said in a statement accompanying the earnings report. "Our options for the A320 and the E-190 aircraft remain unchanged, which preserves our ability to take advantage of market opportunities."

JetBlue said that in the second quarter, revenue passenger miles increased 13.7 percent from the same period last year, to 6.7 billion.

In trading yesterday, shares of JetBlue were down 29 cents to $11.01. They are down more than 20 percent this year.