Shares of JetBlue Airways (JBLU) fell 25.7% on Tuesday, with an intraday decline of as much as 28.9%. This drop occurred concurrently with the S&P 500 and Nasdaq composite gaining 0.9% and 2% respectively.
Boeing’s revenue wipeout, JetBlue’s stock crash
JetBlue reported its earnings on Tuesday morning, indicating sales of $2.27 billion for the fourth quarter of 2024, resulting in a loss of $0.21 per share. This loss was narrower than Wall Street’s expected $0.29 loss per share. However, the company’s capacity had declined, and its top-line revenue was smaller year over year.
The airline is undertaking several strategies aimed at regaining profitability and increasing sales. Under CEO Joanna Geraghty, the JetForward initiative will continue into 2025, with the company focusing on execution and building on momentum achieved in 2024.
Despite these efforts, JetBlue’s guidance for 2025 did not meet investor expectations. The airline indicated that it plans to operate fewer flights in the first quarter compared to the previous year, and its projected revenue growth fell below earlier forecasts.
Tech stocks rebound as DeepSeek fears fade but is the AI threat over?
The future effectiveness of the JetForward program, which includes restructuring flight routes and resizing the fleet for efficiency, will be crucial. While the program has shown early benefits, its sufficiency in reversing the current trends remains uncertain.
Other airline stocks experienced varying performance, with many reporting declines. For example, Boeing Co (NYSE:BA) revealed a 31% year-over-year revenue decline, totaling $15.242 billion in the fourth quarter of 2024, falling short of the consensus estimate of $16.174 billion.
Boeing’s adjusted loss per share increased to $5.90 from $0.47 in the same quarter of 2023, which was also below the consensus estimate of a $2.44 loss. The company attributed its results to the impact of the IAM work stoppage, charges on certain defense programs, and costs related to workforce reductions from the previous year.
For the quarter, Boeing recorded an adjusted operating loss of $4.042 billion, in contrast to adjusted operating earnings of $90 million a year earlier. The core operating loss margin jumped to 26.5% compared to a 4% profit the previous year.
Boeing’s operating cash outflow for the quarter was $3.45 billion, compared to a cash inflow of $3.381 billion year-over-year. Additionally, the free cash outflow was $4.098 billion. Revenue from commercial airplanes plunged 55% year-over-year to $4.862 billion, largely due to the IAM work stoppage and reduced aircraft deliveries, which declined by 64% to 57 airplanes. The backlog for Boeing included over 5,500 planes valued at $435 billion.
In its defense segment, revenue fell 20% year-over-year to $5.411 billion, while the backlog stood at $64 billion, with 29% from international customers. Meanwhile, revenue from global services rose by 6% year-over-year to $5.119 billion, with the operating margin improving by 210 basis points to 19.5%, reflecting higher commercial volumes.
Boeing’s cash and investments in marketable securities increased to $26.3 billion from $10.5 billion, aided by a $24 billion capital raise, which was partially offset by cash flow usage and debt repayment. The company’s total debt decreased to $53.9 billion from $57.7 billion, following the early repayment of a $3.5 billion bond. Boeing continues to hold $10 billion in undrawn credit facilities.
In 2024, the company delivered 348 commercial airplanes and secured 279 net orders, bringing the total backlog to $521 billion.
Featured image credit: JetBlue
