JetBlue Sings The Blues
Carl Gutierrez, 04.28.10, 10:25 AM EDT
High costs and a one-time charge result in a surprise loss for the airline.

JetBlue’s record first-quarter revenue wasn’t enough to keep its earnings out of the red, disappointing investors in an otherwise upbeat day for airline stocks.

On Wednesday, JetBlue ( JBLU - news - people ) reported a first-quarter loss of $1 million, or 1 cent per share, compared to the gain of $12 million, or 5 cents per share, posted in last year’s corresponding period. Wall Street expected a quarterly profit of 3 cents per share.

"While we are disappointed to report a loss for the quarter, we are confident that we are taking the right steps to return to sustained profitability," said Dave Barger, JetBlue's chief executive. The first-quarter report was reminiscent of the high cost issues the Forest Hills, N.Y.-based firm warned about at the beginning of the year. (See "Costs Weigh On JetBlue.") Much of the shortfall came from higher fuel costs, and a $15 million one-time charge to switch to a new reservation system.

Sales meanwhile rose 9.7% to a first-quarter record of $870 million, from $793 million. Despite the gain, JetBlue's top-line also fell short of expectations, as Wall Street anticipated revenue to the tune of $880.5 million. The company noted that severe winter storms in the Northeast cut sales by about $15 million.

There was still good in the report. Yield per passenger mile in the first quarter was 12.13 cents, up 3.8% compared to the first quarter of 2009. Passenger revenue per available seat mile for the first quarter 2010 increased 4.9% year over year to 9.32 cents and operating revenue per available seat mile increased 3.4% year-over-year to 10.32 cents.

"We are encouraged by recent revenue trends as the economic environment appears to be improving and we derive additional revenue benefits from our new customer service system," said JetBlue Chief Financial Officer Ed Barnes.