Stock Market Today, Oct. 27: JetBlue Surges 19% on Stronger Q4 Revenue Guidance and Margin Improvement
JetBlue Airways (NASDAQ:JBLU), a U.S. low-cost passenger airline focused on East Coast leisure and transatlantic routes, closed at $2.82, up 18.99%. Shares rose after third-quarter results and forward guidance showed stronger fourth-quarter unit revenue and margin improvement. Trading volume reached 69.8M shares, coming in about 152% above its three-month average of 27.7M shares. JetBlue Airways IPO'd in 2002 and has fallen 79% since going public.
How the markets moved today
S&P 500 (SNPINDEX:^GSPC) closed at 7,723, up 0.60%, while the Nasdaq Composite (NASDAQINDEX:^IXIC) finished at 26,478, up 1.18%. Among passenger airlines, Delta Air Lines (NYSE:DAL) closed at $81.45, up 2.90%, and United Airlines Holdings (NASDAQ:UAL) closed at $104.71, up 3.99%, as investors weighed airline earnings, margin guidance, and balance-sheet relief.
What this means for investors
JetBlue needed a solid quarter after its stock had declined 43% over the last year, and the company seemed to deliver with:
- operating revenue rising 21%
- revenue per available seat mile (RASM) increasing 18%
- operating margins expected to rise one to two percentage points in Q4
- $2.2 billion in liquidity and $7 billion in unencumbered assets available
Perhaps the biggest takeaway of the earnings call came from CEO Joanna Geraghty, who explained, "We remain focused on operating profitability in 2027, and we see multiple paths to at least $1 in earnings per share and positive free cash flow in 2028."
Considering fuel prices soared 57% from last year, this was a solid quarter for the highly leveraged company. That said, JetBlue has a $7 billion net debt balance and is likely to pay roughly $600 million in interest this year -- so it still has plenty of work ahead as it battles its debt load and macroeconomic pressures.
Given the company's debt load, I'm not interested in the stock at the moment, though today's earnings showed some promise.
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Josh Kohn-Lindquist has no position in any of the stocks mentioned. The Motley Fool recommends Delta Air Lines. The Motley Fool has a disclosure policy.
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