Why JetBlue Stock Popped This Morning
Key Points
JetBlue reported a $0.60 per share loss last night and missed on revenue.
Management is promising profits by 2028, however, and investors like the sound of that.
JetBlue (NASDAQ:JBLU) stock crashed ahead of its Q3 earnings report yesterday, falling nearly 10% on worries the airline may be approaching bankruptcy -- but then a miracle happened.
Last night, after the crash, JetBlue reported its Q3 2026 financial results. The news wasn't great. Analysts expected the company to report only a $0.53 per share loss, but JetBlue lost $0.60 per share instead, and its $2.8 billion in revenue also fell short of expectations.
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Regardless, investors seemed excited by management's outlook, and this morning, JetBlue stock is bouncing back big time -- up 13.9% as of 10 a.m. ET.
Image source: Getty Images.
JetBlue Q3 earnings
Let's get the bad news out of the way before we address the forecast. JetBlue reported 21% growth in operating revenue in Q3, and grew its operating revenue per available seat mile ("RASM") 18.4% year-over-year. Expenses grew even faster than that, however, rising 19.4%, and preventing the company from earning a profit.
Hurting results especially was the rising cost of jet fuel, which soared 57% year over year. Absent that cost, expenses would have been up only 7% year over year -- meaning that right now, fuel costs may be the only thing that's preventing JetBlue from returning to profitability.
What's next for JetBlue stock
At least, that's what investors seem to be betting on.JetBlue president Marty St. George sees the company's "strong revenue performance [as] encouraging," expects revenues to keep growing into 2027 "and beyond," and predicts profit margins will expand in Q4 "despite fuel prices forecasted to be 85% higher than in the same period last year."
Looking even farther out, JetBlue predicts it will be profitable and free cash flow-positive again by 2028, earning at least $1 per share. That's a long way from a bankruptcy prediction!
No wonder its shareholders are happy today.
Rich Smith has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.