NEW YORK — JetBlue reported a $172 million net profit for the fourth quarter (Q4) of 2016, down 9.5% year-over-year. For the full year 2016, JetBlue reported a net profit of $759 million, up 12.1% YOY.
JetBlue achieved these results on Q4 operating revenues of $1.6 billion, up 3.0% YOY, with full year operating revenues of $6.6 billion up 3.4% YOY. The revenue growth was accompanied by capacity growth of 4.5% YOY in Q4 and 8.9% YOY for the full year, with unit revenues (PRASM) dropping 1.7% YOY in Q4 and 6.7% for the full year.
Operating expenses pushed up 6.5% YOY in Q4 to $1.3 billion and 2.3% YOY for the full year to $5.3 billion with the big contribution coming from salary and wage increases. Fuel expenses were down 2.7% YOY in Q4 to $291 million as oil prices ticked up and down 20.3% YOY for the full year to $1.1 billion.
Based on these revenue and expense figures, JetBlue delivered operating margins of 18.0% in Q4 and 19.8% for the full year.
Airways Senior Business Analyst Vinay Bhaskara live-blogged the JetBlue quarterly earnings call for Q4 and full year 2016. His overall takeaway was:
Overall a pretty solid quarter for JetBlue on the top line and even dipping down into things like Q4 PRASM. The network performance is still robust, and Mint is still very much a winner. But JetBlue seems to be stepping into the shoes of American Airlines as the carrier with a contentious relationship with Wall Street about PRASM. My overall feelings about the PRASM craze on Wall Street today are well known, but at the same time, it doesn’t pay if you’re an airline to just spite Wall Street over the topic. The January PRASM figure down 8-9% YOY is really, really rough. The question about revenue management tools was also responded too oddly – if your RM tool doesn’t allow you to comfortably forecast out just one quarter ahead, then maybe it isn’t a great tool. While 2017 looks to be another strong year in terms of financial performance, JetBlue’s share price might not reflect that.
You can read his coverage of the earnings call below via the ReplyAll tool.