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Small Loss for JetBlue

Revenue is a little short of estimates.

Updated from 8:13 a.m. EDT

JetBlue Airways

(JBLU) - Get JetBlue Airways Corporation Report

said it would cut back on its growth targets after losing $500,000 in the third quarter, as demand took a hit because of security-related concerns.

CEO David Neeleman said the airline would trim the expansion of its Embraer 190 fleet, in addition to previously announced cutbacks in A320 growth. He said capacity would increase between 14% and 17% in 2007, below JetBlue's prior estimates.

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"If you get a lot of 190s -- 18 a year -- all going into brand new markets, all going shorthaul ... you have a lot of markets to mature," Neeleman said, on a conference call. He said the airline would benefit from being "able to add at a little bit slower rate," and could sell order positions for Airbus and Embraer airplanes.

JetBlue's loss was less than a penny a share and reversed last year's profit of $2.7 million and 2 cents a share. Revenue was $628 million, up 38.7%. Analysts surveyed by Thomson Financial had expected the airline to break even on revenue of $630.6 million.

For the quarter, revenue per available seat mile grew 16.5% to 8.33 cents. Yield rose 23.5% to 9.72 cents as fares increased. JetBlue's load factor was 80.4%, a decline of 6.2 points. The number of revenue passenger miles grew 10.5%, while capacity as measured by available seat miles grew 19%.

On the cost side, cost per available seat miles, excluding fuel, rose 4.7% to 4.98 cents. Operating expenses for the third quarter were $587 million, up 33.7% from the same period of 2005. JetBlue ended the third quarter with $456 million in cash and investment securities.

As for the fourth quarter, JetBlue expects capacity to increase between 13% and 15%. Operating margin is expected to grow between 6% and 8%, with pretax margins advancing between 1% and 3%, assuming a fuel cost of $1.94 a gallon.