JETBLUE LOWERS ANNUAL REVENUE FORECAST AS LATIN AMERICA OVERSUPPLY BITES

(Reuters) -JetBlue Airways trimmed its annual revenue forecast on Tuesday after reporting lukewarm first-quarter revenue due to bloated capacity in Latin America, sending its shares down more than 12% premarket.

Struggling to return to profitability, JetBlue last month outlined plans to cut some of its routes and markets that were unprofitable, including Bogota in Colombia and Lima in Peru, and reallocate resources to better-performing regions.

The carrier said on Tuesday there was healthy demand in peak periods during the quarter and noted its premium seating options performed well, but said oversupply in the Latin American market would eat into its business this year.

The Caribbean and Latin American regions represented more than 33% of JetBlue's overall capacity in 2023, a regulatory filing showed.

JetBlue now expects fiscal 2024 revenue to decline in the low-single-digit percentage range, compared with its prior forecast for revenue to be roughly flat. Analysts had expected full-year revenue to dip very marginally to $9.61 billion, according to LSEG data.

The company forecast second-quarter revenue to fall between 6.5% and 10.5%, compared to estimates of a near 4% drop.

"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," Citi Research analyst Stephen Trent said.

JetBlue's report weighed on airline stocks on Tuesday despite United Airlines and Delta Air Lines issuing upbeat current-quarter forecasts in recent weeks.

American Airlines and Southwest Airlines, which are set to report quarterly earnings later this week, fell about 3% and 1%, respectively. United Airlines, Delta Air Lines and Alaska Air slipped about 1% each.

JetBlue's efforts to cut costs showed signs of bearing fruit, as its adjusted per-share loss of 43 cents in the quarter ended March 31 came in smaller than estimates of a 52-cent loss. Its total operating revenue fell 5.1% to $2.21 billion, in line with estimates.

(Reporting by Deborah Sophia in Bengaluru; Editing by Shounak Dasgupta and Vijay Kishore)

2024-04-23T13:17:03Z dg43tfdfdgfd