JetBlue's Stock Drops 10% Premarket as Q1 Losses Widen, Ceo Warns of Full-year Losses

JetBlue Airways Corp. experienced a notable decline in its stock price, plummeting by 16.4% on Tuesday, as the airline reported a significant widening of its first-quarter loss compared to the previous year and cautioned investors about the soft outlook for the full year.

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This decline marks the largest percentage decrease since March 18, 2020, when the stock fell by 19.5%, according to Dow Jones Market Data.

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The company reported a loss of $716 million, or $2.11 per share, for the quarter, which is wider than the loss of $192 million, or 58 cents per share, recorded in the same period last year. Adjusting for one-time items, the per-share loss was 43 cents, narrower than the consensus estimate of a 52-cent loss from FactSet analysts. Revenue also saw a decline of 5.1% to $2.209 billion from $2.328 billion a year ago, slightly below the consensus estimate of $2.202 billion.

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Chief Executive Joanna Geraghty expressed concerns about the full-year outlook, particularly citing the significant capacity increase in the Latin region, a substantial part of JetBlue's network, which is expected to continue pressuring revenue.

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JetBlue President Marty St. George outlined the company's strategy to cut back on unprofitable locations and redirect resources to more lucrative markets. Specifically, JetBlue announced plans to scale back operations at Los Angeles International Airport and shift flights to more profitable opportunities in core leisure markets, resulting in a reduction of departures by approximately one-third effective June 13.

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JetBlue now anticipates second-quarter revenue to decline by 10.5% to 6.5% and projects full-year revenue growth to be in the low single digits. Despite the recent decline, the stock has still gained 13.2% year-to-date, outpacing the S&P 500's gain of 6.2%.

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The disappointing results from JetBlue had a negative impact on several other airline stocks. Shares of American Airlines Group Inc., set to report first-quarter results on Thursday, fell by 1.1%. Meanwhile, United Airlines Holdings Inc., which recently reported better-than-expected first-quarter results and provided an optimistic outlook for the second quarter, initially dropped in premarket trading but recovered to a 0.4% increase in morning trading.

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Delta Air Lines Inc.'s stock also experienced a dip in premarket trading but rebounded to a 0.8% increase in morning trading. Delta had previously reported record first-quarter revenue, driven by a surge in demand for business travel, and offered strong guidance for the future. Alaska Air Group Inc.'s stock showed a slight decline in premarket trading but rose by 0.9% in morning trading. Last week, Alaska Air shares surged to an eight-month high following the release of better-than-expected first-quarter results and revenue that surpassed analyst estimates.

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