Profits Surge at JetBlue - TheStreet

Profits Surge at JetBlue

Still, its earnings miss estimates.
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JetBlue

(JBLU) - Get Report

said second-quarter net income rose 50%, and the carrier projected a full-year profit, but it nevertheless said it will slow its future growth.

The airline said net income was $21 million in the latest quarter, or 11 cents a share. Analysts surveyed by Thomson Financial had estimated per share earnings of 12 cents. Revenue rose 19.4% to $730 million, below estimates of $753 million.

Passenger revenue per available seat mile increased 5.4% to 8.46 cents, partially due to stage-length reductions, which spread revenue over fewer miles.

"We are pleased, especially given the challenging domestic revenue environment and the fact that 16% of our

capacity was in new markets," said CEO Dave Barger on a conference call.

The carrier is adding just four new markets this year, said Barger, who replaced founder David Neeleman as CEO in May. Although June's performance was hindered by the weather-related cancellations of 401 flights, Barger said the month was strong and the third quarter outlook is good, with robust bookings in July and August.

Meanwhile, JetBlue said it will sell three Airbus A320 jets to a European leasing company later this year and will defer delivery of 16 Embraer 190's, originally scheduled for 2007 through 2012, to 2013 through 2015. The reductions mean JetBlue will add seven A320s in 2007 and six each in 2008 and 2009, or 11 fewer than planned for the period.

During the quarter, capacity grew 12%. On the expense side, cost per available seat mile, excluding fuel, rose 3.3%.

Looking ahead, CFO John Harvey said the year will be profitable despite higher fuel costs and the $41 million impact of first-quarter weather cancellations. Capacity will grow 10% to 12% for the third quarter and the full year, while passenger RASM will grow 7% to 9% in the third quarter and 6% to 8% for the year.