JetBlue Sees Red Ink, Posts Net Loss For Last Quarter Of 2005 & Full Year 2005
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(February 1, 2006) -- JetBlue Airways, which is LB Airport's largest commercial passenger carrier, has announced a net loss for the last quarter of 2005 of $42.4 million and a net loss for the full year of 2005 of $20.3 million ($0.13 per share).
The company further announced that it expects to post an negative operating margin between 3-5% assuming an all in aircraft fuel cost per gallon of $1.92.
In a written release, the company said its 4th quarter loss (representing a $0.25 loss per share) includes "$13.0 million in unusual charges consisting of $6.9 million in non-cash stock-based compensation expense related to the accelerated vesting of certain employee stock options and a $6.1 million charge for development costs related to a maintenance and inventory tracking system that will not be implemented."
JetBlue said that excluding the $19.9 million in "unusual charges" noted above, "the reported net loss would have been $32.0 million, or a loss per diluted share of $0.19 in the fourth quarter. This compares with fourth quarter 2004 net income of $1.5 million, or $0.01 per diluted share. For the full year 2005, net loss totaled $20.3 million, or a $0.13 loss per share. Excluding these two unusual items, the reported net loss would have been $9.8 million, or a loss per diluted share of $0.06 for the full year ended December 31, 2005, compared with net income of $46.2 million, or $0.28 per diluted share, for the full year 2004."
And looking ahead to the first quarter of 2006, the company said:
JetBlue expects to report a negative operating margin between 3% and 5% assuming an all in aircraft fuel cost per gallon of $1.92. For the first quarter, CASM is expected to increase between 17% and 19% over the year-ago period, at the assumed $1.92 aircraft fuel cost per gallon. Excluding fuel, CASM in the first quarter is expected to increase between 6% and 8% year over year. Capacity is expected to increase between 27% and 29% over the same period last year. For the full year 2006, JetBlue expects to report an operating margin between 2% and 4% based on an assumed aircraft fuel cost per gallon of $1.98, net of hedges. CASM for the full year is expected to increase between 10% and 12% over full year 2005, at the assumed $1.98 aircraft fuel cost per gallon. Excluding fuel, CASM in 2006 is expected to increase between 4% and 6% year over year. Capacity for the full year 2006 is expected to increase between 28% and 30% over 2005. Based on these assumptions, the company expects to report a net loss for both the first quarter and the full year 2006.
"We are very disappointed in our performance this quarter as we continued to feel the effects of record-high fuel prices and a tough revenue environment, compounded by the impact of Hurricane Wilma and the residual effects of Hurricanes Katrina and Rita," JetBlue Chairman/CEO David Neeleman said. "Although we saw a 7.4% increase in revenue per available seat mile (RASM) in the face of 25% capacity growth, it was not nearly enough to offset the impact of high fuel costs."
JetBlue posted an operating loss for the quarter of $31.5 million "resulting in a negative 7.1% operating margin. Excluding the impact of the unusual items, the reported operating margin would have been negative 4.1%."
The company said this compares to "operating income of $10.8 million and a 3.2% operating margin in the fourth quarter of 2004. For the full year 2005, operating income was $47.6 million, resulting in an operating margin of 2.8%. Excluding the impact of the unusual items, operating margin for the full year 2005 would have been 3.6%. This compares with operating income of $110.9 million and an 8.8% operating margin for the full year 2004.
JetBlue's operating revenues for the quarter totaled $446.0 million, "representing growth of 34.0% over operating revenues of $332.8 million in the fourth quarter of 2004. For the full year, operating revenues totaled $1.70 billion, representing growth of 34.5% over operating revenues of $1.26 billion for the full year 2004."
The company noted that during the fourth quarter of 2005, JetBlue "achieved a completion factor of 98.9% of scheduled flights, compared to 99.9% in 2004. On-time performance, defined by the US Department of Transportation as arrivals within 14 minutes of schedule, was 70.9% in the fourth quarter of 2005 compared to 80.1% for the same period in 2004. For the full year 2005, JetBlue achieved a completion factor of 99.4%, identical to the full year 2004. On-time performance for the full year 2005 was 71.6%, compared to 81.6% for the full year 2004. The Company attained a load factor in the fourth quarter of 2005 of 81.1%, a decrease of 1.8 points on a capacity increase of 24.7% over the fourth quarter of 2004. Load factor for the full year 2005 was 85.2%, an increase of 2.0 points on a capacity increase of 25.3%."
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