JetBlue Tumbles on Margin Pressure - TheStreet

JetBlue Tumbles on Margin Pressure

The company cites pricing issues, particularly in western markets.
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Discount airline

JetBlue

(JBLU) - Get Report

was punished in Friday's premarket session after saying its margins were being pressured by competition in the West and a shortfall in flights to Southern California because of last month's fires.

The shares were recently down $4.32, or 14%, $27.06 on Instinet.

In an otherwise solid release about November traffic, JetBlue said margins were being squeezed by capacity additions, particularly in western markets, that were forcing it to lower fares. The company now sees fourth-quarter margins of 13% to 14%.

It also cited the "ongoing maturation of our newer markets" and the depressed traffic to Southern California.

"Despite the challenging revenue environment facing the industry, we still anticipate a very solid fourth quarter performance, thanks to the continued dedicated efforts of our great crewmembers," JetBlue said.

Analysts surveyed by Thomson First Call are expecting the company to earn 23 cents a share in the fourth quarter.