JetBlue stock tumbles on full-year guidance cut, Q1 results

Shares of JetBlue Airways (JBLU) plunge ahead of Tuesday's market open, despite the airline reporting better-than-expected first-quarter earnings results. While JetBlue narrowly surpassed revenue estimates — posting $2.21 billion compared to analyst expectations of $2.2 billion — and reported better-than-anticipated adjusted losses per share, the company slashed its full-year revenue outlook.

JetBlue forecasts elevated capacities in its Latin American region will put pressure on revenue growth going forward.

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This post was written by Angel Smith

Video transcript

SEANA SMITH: Let's move on to another earnings report here out this morning. And that is JetBlue. Well, shares, they're, actually, plunging after the airline slashed its revenue forecast for the year. It now expects a drop of over 10%, at least, for the second quarter.

The company's CEO saying that they expect, quote, "significant elevated capacity in their Latin region, which will continue to pressure revenue."

And Brad, that last thing I just mentioned there in the intro, the excess capacity in the Latin region, was something that they called out a couple of times within this earnings release. Really, maybe, one of the challenging spots here for JetBlue and its road to recovery, at least, what it hopes to be a road to recovery here yet, as it tries to compete with some of the larger domestic players here in the US.

And, again, shares selling off on the heels of these results. And we're looking at a drop of, I believe, right around 16% here ahead of the open.

BRAD SMITH: Yeah. There was an old exec who I used to work with who used to say, you were always in the constant process of reinventing yourself. And JetBlue might be going through its own reinvention here. And the share price is reacting to that, as well here.

The company talking about that they're going to announce a number of significant network changes. In the first quarter, they've already started to roll out that process. And what that's aimed to do is really free up some of the unprofitable flying the unprofitable routes. That is where they're going to focus perhaps more into the Latin Am or the LATAM, excuse me, routes that they do have.

And that's where it's impacting some of the revenue that they're expecting to see as well, which you mentioned, and what the share price is also reacting to here this morning. So, really, focusing in on some of the leisure markets, where they say JetBlue has historically won. Larger question of how that rejiggers or recalculates the overall earnings equation for this company going forward.

A company that in the last year and a change has had multiple big hits to the stock, not being allowed to combine with Spirit. Got the major move forward to be able to still have the Northeastern alliance, as well. That was broken up.

So all of these things considered, it's just been question mark after question mark for JetBlue as of right now. And we'll see exactly what the new operating expense profile looks like as they get off of some of these unprofitable routes as they deem them.

SEANA SMITH: Yeah. Reallocating some of their resources to some of their better performing regions there, as the company does struggle to return to profitability.