Here’s What the Charts Say

JBLU stock initially collapsed to a new 52-week low at $6.21 heading into its Q3 2022 earnings report. It managed to slingshot back up on the weekly MSL trigger breakout through $7.20. It’s making another attempt to break through the very tough $7.60 resistance area. The rising volume on the bounce off the 52-week lows indicates that buyers are patiently and steadily bidding up shares slowly after a sharp capitulation bottom. The weekly 20-period exponential moving average (MA) resistance sits at $8.23 followed by the weekly 50-period MA at $11.11. The $9.29 remains a solid resistance level followed by the $10.95 level. Investors watching for JBLU pullback should monitor the $7.20 weekly MSL trigger, $6.75 support, $6.21 swing low, and $5.51 sticky 5’s price levels. 

Back in the Black

On October 25, 2022, JetBlue released its fiscal third-quarter 2022 results for September 2022. The Company reported an earnings-per-share (EPS) profit of $0.21 excluding non-recurring items versus consensus analyst estimates for a profit of $0.24, a (-$0.03) beat. Revenues grew 29.9% year-over-year (YoY) to $2.56 billion beating analyst estimates for $2.55 billion. Revenue per available seat mile rose 23.4% year over three. Strong leisure and VFR trends drove the quarter. Hurricane Fiona and Ian had net neutral impacts to unit revenues in the quarter, but negatively affected CASH ex-fuel by one point to CASM-ex in the quarter and had no impact in the fourth quarter. The Company paid down $66 million of debt, funded $260 million in capex, and spent $25 million in Spirit Airline acquisition-related fees. Jet Blue ended the quarter with $2.3 billion in cash and investments. The realized fuel price was $3.84 per gallon compared to $2.06 in Q3 2019, up 86%. Jet Blue entered into a forward fuel derivatives contract to hedge 27% of its fuel consumption for the fourth quarter with an average all-in price of $3.65 per gallon in the fourth quarter.

Merging with the "Most Hated Airline" in the U.S.

JetBlue’s merger with arguably the country’s “most hated airline” Spirit Airlines (NYSE: SAVE) is expected to close before the first half of 2024. JetBlue beat out Frontier Airlines (NASDAQ: ULCC), to the relief of Frontier’s shareholders, in its bid to acquire Spirit for $33.50 per share in cash or $3.8 billion. The October 19^th shareholder approval to acquire Spirit Airlines triggered the agreed-upon $272 million prepayment or $2.50 per share cash payment to Spirit shareholders. Incidentally, Spirit Airlines also reported a surprise profit in its most recent earnings. The combination of the two airlines will create the fifth largest airline in the U.S. Jet Blue expects to cover a larger demographic with its combination but faces integration challenges. They expect to fly under one banner by the first-half of 2025, but full integration may take up to five years afterward.