JetBlue (NASDAQ:JBLU) stock was flying high on Tuesday, as considered one of the day’s biggest gainers, up greater than 13% to almost $7 per share. It had been up greater than 20% at its high point on Tuesday.

While the earnings numbers weren’t great for the struggling airline, they were much better than analysts had expected.

JetBlue saw revenue decline 7% in Q2 year-over-year to $2.4 billion, but it surely was higher than Wall Street analysts projected. Net income was just $25 million, or 7 cents per share, however the consensus amongst analysts called for a 13 cents per share loss. Still, net income was off 82% from the identical quarter a yr ago.

With Tuesday’s gains, JetBlue stock is up about 24% year-to-date (YTD). Can it maintain its momentum?

JetBlue jets forward after merger with Spirit is rejected

JetBlue hit some turbulence earlier this yr when its bid to accumulate low-cost carrier Spirit Airlines was rejected by a federal judge. JetBlue had argued that the mixture of the 2 mid-sized airlines would create a bigger player to compete with the large three, thus increasing competition within the space. However the judge saw it in a different way, rejecting the proposal because it might take a low-cost option off the market.

This forced JetBlue to forge ahead, under recent CEO Joanna Geraghty, with a recent strategic plan called JetForward to drive profitability.

The JetForward strategy is targeted on driving efficiencies, cutting costs, and specializing in essentially the most profitable networks.

“We’re actively reinvesting in our core geographies in Recent York, Recent England, Florida and Puerto Rico, while exiting routes and BlueCities that don’t meet our financial hurdle rate,” Marty St. George, JetBlue’s president, said. “As we progress through the second half of the yr, we’ll be announcing additional initiatives designed to further enhance our customer value proposition, close the gap in our product offering to our peers and drive significant financial profit.”

The corporate laid out 4 pillars of JetBlue’s technique to generate $800 million to $900 million incremental earnings from 2025 to 2027. They include:

• Improving on-time performance through various means, including investments in tools and technology, and improving customer support;
• Refocusing its network around leisure flying originating in Recent York, Recent England, Florida and Latin geographies, while exiting 15 cities and more 50 route unprofitable routes;  
• Enhancing its offerings and loyalty perks to draw customers that value premium experiences and optimizing product merchandising to maximise revenue potential; and
• Driving $175 million in structural cost savings through 2027 through data-science optimization, recent technology investments, and labor and infrastructure productivity. It also plans to defer $3 billion of capital expenditures on recent jets through 2029 to enhance its money flow and restore its balance sheet.

“While a lot of these underlying initiatives will take time to ramp to their full potential, with the strong foundation of JetForward, we’re poised to generate $800 – $900 million of incremental EBIT from 2025 through 2027 and expect the profit to be realized evenly over those three years,” Ursula Hurley, JetBlue’s chief financial officer, said.

Is JetBlue a buy?

Tuesday’s surge in stock price had more to do with excitement concerning the plan than its tangible results. Not only were revenue and earnings down within the quarter, but its outlook for the remaining of the 2024 was not great.

JetBlue is looking for available seat miles to be down 3% to six% in Q3 and a couple of.5% to five% for the complete fiscal yr. Revenue is anticipated to be off 1.5% to five.5% in Q3 and 4% to six% for the complete yr.

Meanwhile, the fee per available seat mile is predicted to be up 6% to eight% in Q3 and 6.5% to eight.5% for the complete fiscal yr. Finally, capital expenditures are projected to be $365 million in Q3 and $1.6 billion for the fiscal yr.

Recent leadership appears to be on the precise path, but it surely won’t move the needle on the stock any time soon. The corporate is barely profitable, and it still must execute upon these plans.

That is a protracted term fix value maintaining a tally of, but JetBlue stock might be not one which’s going to maneuver much higher within the near-term, particularly after Tuesday’s big jump.