JetBlue Airways Forecasts Third Quarter Loss

JetBlue Airways (ticker: JBLU) stock is expected to drop by 5% after the low-cost carrier announced that it does not anticipate posting a profit in the third quarter. While the airline reported second quarter revenue of $2.61 billion, in line with expectations, it surprised analysts by revealing a bleak outlook for the third quarter.

Third quarter guidance from JetBlue indicates an adjusted loss of 20 cents to break-even, in comparison to analysts' forecast of 40 cents per share. Additionally, the carrier anticipates a year-over-year decline in revenue between 4% and 8% for the third quarter, in contrast to the projected 2% rise envisioned by analysts.

Despite a strong performance earlier in the year, with a 20% increase in shares since the start of 2023, JetBlue's stock has fallen 17% since hitting a peak in July.

This latest announcement from JetBlue follows the downward trend observed in the airline industry due to concerns about a slowdown in domestic demand. Even though several carriers have reported record-breaking quarters, the sector experienced a decline after Alaska Air Group's (ALK) earnings report, which highlighted anticipated flat to 3% revenue growth compared to last year's third quarter.

JetBlue stock fell 5.6% following Alaska Air's announcement, and subsequent outlook statements from Southwest Airlines (LUV) further reinforced concerns about weakening demand.