Updated from 9:48 a.m. EDT

Heavy competition from rivals grounded JetBlue's ( JBLU) first-quarter growth, with the low-cost carrier announcing earnings that were off nearly 13% from last year's levels.

JetBlue announced first-quarter net income of $15.2 million, or 14 cents a share, down from the $17.4 million, or 17 cents a share, it reported a year ago, but better than the 12-cent Wall Street estimate.

Despite the fact the company boosted revenue by 33.1%, earnings were weaker than last year because operating margins are falling and expenses are starting to skyrocket as the company begins an ambitious expansion. First-quarter revenue came in at $289 million, up from $217.1 million a year ago, but expenses came in at $256.3 million, up 40.3% from the year-ago quarter.

With legacy carriers attacking JetBlue's transcontinental routes with deep fare sales, the low-cost carrier's operating margin was 11.3%, down from 15.9% a year ago. In a sign of how weak pricing has affected JetBlue, yields, a measure of the money the company brings in per mile flown, were off 6.2% from last year.

"We're pleased to have achieved a double-digit operating margin in what has been a challenging quarter, marked by increased competitive capacity and seasonal sluggishness in our East-West markets," said David Neeleman, chairman and CEO.

Although overall expenses have gone up, the company's core operating advantage -- low costs -- remains intact. The carrier, which declined to give forward-looking guidance, said that cost per available seat mile, a key metric called CASM, came in at 6.09 cents, down 2.9% from last year, one of the lowest in the airline industry.

JetBlue shares were up $3.07, or 12%, to $28.78.