JetBlue Airways Corp. :JBLU-US: Earnings Analysis: Q4, 2016 By the Numbers : March 16, 2017

JetBlue Airways Corp. reports financial results for the quarter ended December 31, 2016.

We analyze the earnings along side the following peers of JetBlue Airways Corp. – United Continental Holdings, Inc., Allegiant Travel Company, Southwest Airlines Co., SkyWest, Inc, Alaska Air Group, Inc., Hawaiian Holdings, Inc., Spirit Airlines, Inc. and American Airlines Group, Inc. (UAL-US, ALGT-US, LUV-US, SKYW-US, ALK-US, HA-US, SAVE-US and AAL-US) that have also reported for this period.


  • Summary numbers: Revenues of USD 1641 million, Net Earnings of USD 172 million.
  • Gross margins narrowed from 24.78% to 21.88% compared to the same period last year, operating (EBITDA) margins now 24.31% from 26.54%.
  • Year-on-year change in operating cash flow of 3.62% is about the same as the change in earnings, likely no significant movement in accruals or reserves.
  • Narrowing of operating margins contributed to decline in earnings.

The table below shows the preliminary results and recent trends for key metrics such as revenues and net income growth:

2016-12-31 2016-09-30 2016-06-30 2016-03-31 2015-12-31
Relevant Numbers (Quarterly)
Revenues (mil) 1641 1732 1643 1616 1594
Revenue Growth (%YOY) 2.95 2.67 1.92 6.11 10.24
Earnings (mil) 172 199 180 199 190
Earnings Growth (%YOY) -9.47 0.51 18.42 45.26 115.91
Net Margin (%) 10.48 11.49 10.96 12.31 11.92
EPS 0.5 0.58 0.53 0.59 0.55
Return on Equity (%) 17.51 21.26 20.4 24.03 24.41
Return on Assets (%) 7.22 8.36 7.78 8.98 8.81

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Market Share Versus Profits

Revenues History
Earnings History

JBLU-US‘s change in revenue this period compared to the same period last year of 2.95% is almost the same as its change in earnings, and is about average among the announced results thus far in its peer group, suggesting that JBLU-US is holding onto its market share. Also, for comparison purposes, revenues changed by -5.25% and earnings by -13.57% compared to the immediate last period.

Revenues Growth Versus Earnings Growth

Quadrant label definitions. Hover to know more

Leader, Earnings Focus, Laggard, Revenues Focus

Earnings Growth Analysis

The company’s year-on-year decline in earnings was influenced by a weakening in gross margins from 24.78% to 21.88%, as well as issues with cost controls. As a result, operating margins (EBITDA margins) went from 26.54% to 24.31% in this time frame. For comparison, gross margins were 23.85% and EBITDA margins were 26.27% in the previous period.

Gross Margin Versus EBITDA Margin

Quadrant label definitions. Hover to know more

Differentiated; Low Cost, Commodity; Low Cost, Commodity; High Cost, Differentiated; High Cost

Cash Versus Earnings – Sustainable Performance?

It is important to examine a company�s cash versus earnings numbers to gauge whether its performance is sustainable.

JBLU-US‘s change in operating cash flow of 3.62% compared to the same period last year is about the same as its change in earnings this period. Additionally, this change in operating cash flow is about average among its peer group. This suggests that the company did not use accruals or reserves to manage earnings this period, and that, all else being equal, the earnings number is sustainable.

Operating Cash Flow Growth Versus Earnings Growth

Quadrant label definitions. Hover to know more

Cash Flow based Earnings, Likely Non-cash Earnings, Low Cash Flow Base, Likely Undeclared Earnings


The company’s decline in earnings has been influenced by the following factors: (1) Decline in operating margins (EBIT margins) from 20.70% to 18.04% and (2) one-time items that contributed to a decrease in pretax margins from 19.01% to 16.70%

EBIT Margin Versus PreTax Margin

Quadrant label definitions. Hover to know more

Operation driven Earnings, One-time Favorables, Low Earnings Base, One-time Unfavorables
EBIT Margin History
PreTax Margin History

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Company Profile

JetBlue Airways Corp. provides air transportation services. It carries more than 30 million customers a year to 86 cities in the U.S., Caribbean, and Latin America with an average of 850 daily flights. The company offers flights and tickets to more than 82 destinations, with accommodations such as free TV, free snacks, and most legroom. JetBlue Airways was founded by David Gary Neeleman in August 1998 and is headquartered in Long Island City, NY.

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