JetBlue Airways, a low-fare carrier, will sell as many as 8.6 million shares of common stock at $18 each in the second such offering since the carrier became a publicly traded company in 2002.
The sale would generate as much as $155.3 million that JetBlue plans to spend on aircraft and other items, the company said in a statement Monday. JetBlue, based in New York, will sell 7.5 million shares, and add as many as 1.1 million additional shares, depending on demand. Morgan Stanley and Raymond James Financial Inc. are managing the sale.
"The timing is a surprise," Ray Neidl, a Calyon Securities analyst in New York, said Monday in an interview. "I thought they might wait until next year, until the market picked up a bit."
The company expects to report a fourth-quarter loss, its first since 2000, because of continued high fuel prices and costs tied to changes in employee compensation.
"We are committed to maintaining a strong balance sheet that will allow us to finance our growth at attractive levels," said Jenny Dervin, a JetBlue spokeswoman. "In this environment, it is prudent to maintain attractive cash levels."
JetBlue may want to raise additional cash going into a slow winter season, Neidl said. The company has adequate cash and "there were no alarms raised" during the airline's Oct. 20 third-quarter earnings call with analysts, he said.
In that call, JetBlue Chief Financial Officer John Owen said the carrier would consider equity offerings "if we think it's prudent to maintain the balance-sheet leverage of the company at a lower level."
JetBlue shares rose 20 cents to close at $18.52 Monday on the Nasdaq Stock Market. The shares are down 60 percent since peaking at $46.84 in October 2003.
The company last sold stock in July 2003, raising $122 million through the sale of about 3 million shares.
JetBlue said last month it would split its stock three-for- two, increasing the number of shares outstanding by 50 percent. The stock will be distributed on Dec. 23 to shareholders of record as of the close of business Dec. 12.