JetBlue Airways Corp. fell the most in two months after fourth-quarter profit tumbled 96 percent, more than analysts projected, as superstorm Sandy forced flight cancellations and reduced travel demand.
More than half of JetBlue’s departures are from New York’s John F. Kennedy International, and the carrier had to cancel 1,700 flights there and at other airports over five days in October when Sandy hit the U.S. Northeast. People living in the area were slow to resume travel in November, JetBlue has said.
“An uninspiring quarter, in our view, though not particularly surprising given heavy New York concentration and significant short-term demand pressures associated with Hurricane Sandy,” Jamie Baker, a JPMorgan Chase & Co. analyst in New York, said in a report. He rates the shares overweight.
JetBlue dropped 2.7 percent to $6.07 at the close in New York, the largest one-day decline since Nov. 14. The shares have gained 6 percent this year, compared to a 9 percent increase for the Bloomberg U.S. Airlines Index.
Net income fell to $1 million, or break-even on a per-share basis, from $23 million, or 8 cents, a year earlier, the New York-based carrier said in a statement today. That compared with the 2 cents-a-share average estimate from nine analysts, according to data compiled by Bloomberg.
Sales rose 4.2 percent to $1.19 billion from $1.15 billion a year earlier as passenger traffic increased 4.3 percent.
Sandy also is affecting demand for travel around the Presidents Day holiday next month because New York-area schools are staying in session to make up for days they were closed after the storm. The holiday normally brings a “big peak” in demand for JetBlue, Chief Executive Officer Dave Barger said today in an interview.
“We remain very upbeat with what we’re seeing with revenue, but we’re just being realistic” about the effect on demand, he said. “There’s not going to be a holiday. Kids are going to be kept in school.”
Sandy cut operating income by $30 million in the fourth quarter while reducing passenger revenue by about $45 million, JetBlue said today.