(Updates share price, adds details on storms)
By Alana Wise
NEW YORK, Oct 24 (Reuters) - JetBlue Airways Corp said on Tuesday that profit fell in the third quarter, hurt by higher operating expenses and hurricanes-related flight cancellations, and warned those factors would cut into fourth-quarter results.
JetBlue shares were up 2.2 percent to $20.31 at midday despite the steep uptick in year-over-year operating expenses through the fourth quarter, on its slightly stronger-than-expected results.
"JetBlue provided an in-line (albeit, storm-impacted) 3Q result, accompanied by 4Q (unit revenue) commentary that we believe satisfies expectations," JPMorgan analyst Jamie Baker wrote in a research note.
"That said, the company continues to emphasize a longer-term cost target that we view as highly ambitious, particularly with pilot economics set to escalate in the near-to-medium term."
JetBlue's earnings fell to $179 million, or 55 cents per share, from $199 million, or 58 cents, in the year-ago quarter. Wall Street expected earnings of 53 cents, according to Thomson Reuters I/B/E/S.
The impact from higher expenses and the hurricanes will ripple well into the fourth quarter, diminishing earnings by 10 cents to 13 cents per share.
JetBlue expects operating expense per available seat mile, excluding fuel, to go up between 5 percent and 7 percent in the fourth quarter. That compared to an increase of 5.6 percent in the same period last year, excluding fuel, profit-sharing and related taxes.
"We are confident that the adjustments we are making to our network will limit any ongoing financial impact in 2018," JetBlue Chief Executive Officer Robin Hayes said in a statement.
Operating expenses increased by $125 million, or 9.1 percent, in the third quarter from the previous year on the back of significantly higher fuel and labor costs.
Including fuel, JetBlue's operating expense per available seat mile rose by 5.2 percent in the quarter to 10.50 cents.
The airline has struggled to keep down costs of its largely New York-based operation, and the more expensive fuel coupled with industry demands for better wages have made it more difficult to keep a lid on costs.
Across the industry, results were damaged by a string of debilitating Atlantic hurricanes.
Storms Irma and Maria cost JetBlue about $44 million in lost revenue and will drag fourth-quarter revenue by about $70 million to $90 million.
The hurricanes resulted in 2,500 canceled JetBlue flights over 30 consecutive days of disrupted operations. (Reporting by Alana Wise; Editing by Bill Rigby and Jeffrey Benkoe)