JetBlue Lowers Annual Revenue Forecast Stock Falls 16%

JetBlue Airways ( JBLU ) has revised its annual revenue forecast downwards, in light of its lackluster first-quarter revenue results. The company has attributed its disappointing revenue performance to an overabundance of capacity in the Latin American market, which has resulted in a more than 16% decline in its premarket stock value.

JetBlue ( JBLU ) remains committed to returning to profitability and has recently outlined measures to achieve this, including cutting unprofitable routes and markets such as Bogota in Colombia and Lima in Peru, and reallocating resources to better-performing regions.

While the airline has reported healthy demand during peak periods and noted successful performance of its premium seating options, it has warned that oversupply in the Latin American market will impede its business for the remainder of the year. According to a regulatory filing, the Caribbean and Latin American regions accounted for over a third of JetBlue's overall capacity in 2023.

JetBlue ( JBLU ) has adjusted its fiscal 2024 revenue forecast to a low-single-digit percentage decline, an update from its previous estimate of revenue being relatively stable. Analysts had previously expected full-year revenue to dip slightly to $9.61 billion, according to LSEG data.

The company has forecasted that second-quarter revenue will fall between 6.5% and 10.5%, compared to earlier estimates of a near 4% drop. Citi Research analyst Stephen Trent has commented that "the Q2 and full-year revenue guide looked a little worse than expected ... not nearly as strong as recently reported results from some of the carrier's full-service peers."

Despite upbeat current-quarter forecasts from United Airlines and Delta Air Lines in recent weeks, JetBlue's report has negatively impacted airline stocks on Tuesday. American Airlines and Southwest Airlines are expected to report quarterly earnings later this week and have already seen a 3% and 1% decline, respectively. United Airlines, Delta Air Lines, and Alaska Air have also slipped by approximately 1%.

JetBlue's efforts to cut costs have shown positive signs. Its adjusted per-share loss of 43 cents in the quarter ended March 31 was smaller than the anticipated 52-cent loss. Its total operating revenue fell 5.1% to $2.21 billion, in line with expectations.