US Airways, JetBlue report profits

DALLAS -- US Airways says it made money in the second quarter thanks to gains from fuel-hedging contracts.

JetBlue Airways Corp. said Thursday it posted a second-quarter profit as cost cuts and lower fuel prices balanced out declining passenger demand.

The low-cost carrier also said it expects to post a profit in the next two quarters. Shares jumped 21 cents, or 4.6 percent, to $4.78 in premarket electronic trading.

JetBlue said today it earned $20 million, or 7 cents per share, compared with a loss of $9 million, or 4 cents per share, a year ago.

Revenue fell 6 percent to $807 million.

Thomson Reuters says analysts forecast a profit of 2 cents per share on revenue of $800.1 million.

Forest Hills, N.Y.-based JetBlue said expenses fell by 13 percent in the quarter compared with a year earlier.

JetBlue also made less money per passenger during the quarter. Its yield per passenger mile fell 4.4 percent.

The carrier's fuel prices were down about 38 percent compared with a year ago. JetBlue took $42 million in fuel hedging losses in the period related to bad bets on fuel prices from last year.

JetBlue offered an optimistic outlook for the rest of this year, contrary to most major airlines. It expects to continue posting profits in the third and fourth quarter, although the carrier said revenue will be strained.

JetBlue sees revenue per available seat mile -- or the money it makes to fly one person one mile -- falling between 7 and 10 percent in the third quarter. Costs to fly one passenger one mile are also expected to fall between 12 and 14 percent, mostly due to lower fuel prices. Excluding fuel, costs per available seat mile would increase between 9 and 11 percent, JetBlue said.

The carrier expects to expand capacity slightly -- by between one and three percent in the third quarter.

For the full year, revenue per available seat mile should drop between two and five percent, while capacity will remain close to flat.

Costs per available seat mile should fall between 8 and 10 percent for the year because of cheaper fuel.

Meanwhile, US Airways credits its gain to fuel-hedging contracts.

Without the one-time gains, however, the $58 million profit for parent US Airways Group Inc. turned into a loss of $95 million, or 77 cents per share, as traffic fell from last year's levels.

That compares to a net loss excluding special items of $102 million, or $1.12 per share for the same period last year.

Analysts surveyed by Thomson Reuters, who usually exclude one-time items from their forecasts, expected a loss of 84 cents per share.

US Airways said Thursday revenue fell to $2.66 billion from $3.26 billion a year ago. Analysts expected $2.71 billion.

The company also says it raised more cash in the April-to-June quarter.

Passenger traffic in the April to June period fell 3.1 percent, on a 1.7 percent decrease in capacity. Airlines cut capacity either through scaling back the number of planes in their fleet, the number of flights on a given route, or by using smaller jets on routes with less demand.