Time for a JetBlue (JBLU) comeback?

Submitted by Frank Lara Jr on Mon, 10/22/2007 - 16:39

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JetBlue Airways Corp. (NASDAQ:JBLU) reports earnings for Q3 07 tomorrow and everyone is watching. Shares are now less than $1 away from the 52-week low, so if they don't blow it the call, there could be a nice rally.

Shares of JBLU are down almost 20% in the last 3 months, analysts have downgraded JetBlue shares, cut earnings estimates and price targets and issued bleak statements about JetBlue's near-term performance outlook.

Wall Street has pressured the industry to raise ticket prices to offset higher fuel costs and to squeeze more fliers into crowded planes by cutting capacity. Oil prices have risen by about 30% over the past 52 weeks.

Analysts polled by Thomson Financial expect earnings of 7 cents per share on revenue of $767.4 million. JetBlue posted flat earnings in the third quarter of 2006 due to higher operating expenses and tightened airport-security measures tempering demand after foiled bombing attempts in London.

The Masters have said it before, somehow this trendy-loving-airline company has a way of returning to life just when it looks like they are done for. However if its any indication Southwest Airlines Co. (LUV) and Continental Airlines Inc. (CAL) reported Q3 07 profits last week due to increased travel demand that let them fill more seats at higher fares.

JetBlue's new slogan

Look, I hate airlines stocks and I hate traveling with any airline, but if I can book a flight with them, I use JetBlue every time. The have a huge fan base and I know that's not good enough to buy this stock. Truth be told, Jim Cramer has told us enough times to never buy airline stocks, and I agree. But just when you think JetBlue is done for and everyone's had enough they manage to stay alive like American Idol (please tell me this is the last season).

If you have money to gamble, this could be your earnings call to play, the Masters are giving JBLU a 60% chance of beating the call.

Article by Frank Lara Jr.

Contributor at TheStockMasters.com

Disclaimer: The Author does not hold any positions or shares in the securities mentioned in this publication nor does he stuff his shorts.

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