JetBlue Airways (NASDAQ: JBLU) posted better-than-expected results in the third quarter, but the company is not optimistic about the current quarter. Investors are disappointed, sending JetBlue shares down 16% as of 10:45 a.m. ET.
Good quarter, questions about the year
JetBlue and other airlines enjoyed a surge in demand when the pandemic waned, but in recent quarters there have been signs that demand is ebbing. The airline reported a third-quarter loss of $0.16 per share on sales of $2.37 billion, topping Wall Street's prediction of a $0.25-per-share loss on sales of $2.34 billion.
But the airline warned it expects a combination of hurricane-related cancellations and the impact of the U.S. election to weigh on fourth-quarter results. JetBlue execs said that consumers appear to prefer to be at home and are holding off on major discretionary spending right now.
As a result, JetBlue is now forecasting that full-year 2024 revenue will be down 4% to 5% year over year.
Is JetBlue a buy?
The airline is also dealing with the fallout from an RTX engine problem that has disrupted operations. JetBlue has deferred deliveries of 44 new jets as part of a plan to reduce capital expenditures by about $3 billion through 2029.
JetBlue has been an industry darling through most of its existence, but the airline has increasingly found itself squeezed by the larger titans of the industry. The airline's effort to gain scale, its proposed acquisition of Spirit Airlines, was thwarted by regulatory opposition, meaning JetBlue must navigate these headwinds on its own.
Investors buying on the dip need to be aware that JetBlue's turnaround will take time and could face further delays if the economy sours from here.
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Lou Whiteman has no position in any of the stocks mentioned. The Motley Fool recommends RTX. The Motley Fool has a disclosure policy.
