JetBlue Airways Nets $2.7M in 3Q Profit

JetBlue Airways Corp. on Thursday said its third-quarter profit fell by more than half as the airline industry continues facing pressure from persistently high fuel costs.

The company's results topped Wall Street expectations for a loss, but JetBlue forecast deficits for both the fourth quarter and fiscal 2005. Its shares fell 81 cents, or 4.2 percent, to $18.73 in early trading on the Nasdaq Stock Market.

Quarterly income dropped to $2.7 million, or 2 cents per share, from $8.1 million, or 7 cents per share, the year before. Analysts, however, were expecting JetBlue to post a loss of 1 cent per share, according to a Thomson Financial survey.

Operating revenue totaled $453 million, a 40 percent increase from $323 million and slightly ahead of analysts' consensus target of $451.6 million.

"The combination of record high jet fuel costs, which were 58 percent above fuel costs for the same period last year, hurricanes and a competitive revenue environment has proven difficult for all airlines, and JetBlue is not immune," said David Neeleman, chairman and chief executive, in a statement.

JetBlue's quarterly traffic grew 30.7 percent to 5.48 billion revenue passenger miles - one customer flown a mile - as capacity expanded 28.2 percent to 6.33 billion available seat miles. Occupancy increased 1.7 percentage points to 86.6 percent, but that lagged the company's break-even load factor of 87.4 percent.

The company generated 7.87 cents per passenger mile, up 6 percent from a year ago, although operating expenses swelled 13.8 percent to 6.93 cents per available seat mile.

JetBlue forecast a loss for the fourth quarter and full year, based on expectations for negative operating margin between 5 percent and 7 percent for the quarter. The forecast assumes quarterly aircraft fuel costs of $2 per gallon after hedges, and up to $9 million of a non-cash, one-time expense from the acceleration of stock options.

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