JetBlue Airways (NASDAQ:JBLU) shares advanced 2.5% to $5.40 on Monday afternoon, outperforming major U.S. carriers as a sharp decline in crude oil prices provided a tailwind for the industry. The move came a day before the carrier's second-quarter earnings release, scheduled for Tuesday morning before the market opens.
Brent crude slid nearly 6% to around $90 per barrel, driven by easing geopolitical tensions between the United States and Iran, which reduced fears of further supply disruptions. The drop in oil prices, which occurred after the close of the second quarter, will not impact the upcoming earnings report but could significantly alter JetBlue's outlook for third-quarter fuel costs and cash burn.
Analysts have already been revising their estimates for JetBlue's third-quarter performance. According to FactSet data, the projected adjusted loss per share for the third quarter has narrowed by 35% over the past three months, from a loss of $0.57 to a loss of $0.37. In contrast, the second-quarter loss estimate has only improved by about 5.5%, from $0.73 to $0.69 per share.
For the second quarter, the consensus forecast calls for a loss of $0.69 per share on revenue of $2.69 billion. That would represent a 14.3% increase in revenue compared to the $2.356 billion reported in the same period last year. However, the bottom line remains under pressure from elevated fuel costs. JetBlue has projected second-quarter unit revenue growth of 9% to 12%, while fuel costs are expected to range between $4.26 and $4.36 per gallon. The midpoint of $4.31 is nearly 80% higher than the $2.40 average the airline paid in the second quarter of 2025.
CEO Joanna Geraghty noted in April that demand trends strengthened as the quarter progressed, supporting improved yields. In the first quarter, unit revenue rose 6.5%, but total unit costs increased 8.3%, highlighting the challenge of offsetting higher fuel expenses. JetBlue aims to recover at least 40% of its increased fuel costs through higher fares, but the consensus expects an adjusted loss of $0.69 per share, compared to a loss of $0.16 a year earlier.
For the full year 2026, analysts project an adjusted loss of $2.20 per share, an improvement from the $2.53 loss forecast three months ago. The airline's JetForward initiative is targeting an additional $310 million in operating profit for 2026.
Liquidity will also be a key focus for investors. JetBlue ended March with $2.4 billion in available funds, excluding an unused $600 million credit line. However, S&P Global downgraded the company's credit rating to CCC+ in June, citing expectations that the airline will not generate positive free cash flow until after 2028.
The broader airline sector also gained on Monday, with the U.S. Global Jets ETF (NYSEARCA:JETS) rising 2.4% to $30.82. Delta Air Lines (NYSE:DAL) added 1.8%, American Airlines Group (NASDAQ:AAL) gained 1.4%, United Airlines Holdings (NASDAQ:UAL) rose 1.2%, and Southwest Airlines (NYSE:LUV) edged up 0.2%.
JetBlue's stock closed at $5.40, about 2.5% below the average analyst price target of $5.54 from FactSet. The prevailing consensus rating is “Underweight.” The company will host a conference call at 10 a.m. EDT on Tuesday to discuss its results, with market participants focusing on third-quarter unit revenue, fuel expenses, and non-fuel costs.
Risks remain elevated, as a resurgence of conflict in the Middle East could reverse Monday's oil price decline. Tuesday's results will be critical in determining whether JetBlue's pricing strategy has been sufficient to offset higher fuel costs and whether the market's optimism about a narrowing third-quarter loss is justified.
