JetBlue just had a great quarter, but its stock is getting hammered

JetBlue just reported stellar third-quarter earnings and yet its stock has tumbled more than 7% this morning.

The New York-based boutique airline reported a third-quarter profit of $198 million, which is more than double the $79 million it made during the same period last year.

This translates to earnings of $0.58 per share - beating analyst estimates of $0.57.

Furthermore, JetBlue's fuel-related expenses plummeted 33.6%, which helped the company's profit margin shoot up from 8.6% in Q3 of 2014 to 19.1%.

But investors don't seem to be content, and they selling the stock in droves.

This sell-off may be due to a marginally greater decrease in per unit revenue than analysts expected, Sterne Agee analyst Adam Hackel told Reuters' Jeffrey Dastin.

According to JetBlue, the airline's third-quarter Passengers Revenue Per Available Seat Mile, or PRASM, dropped 0.6%. This a larger drop than analysts' projections of a 0.5% increase to a 0.5% decrease, Reuters reported.

As important as net income and profit margins may be, PRASM is one metric analysts and investors watch like a hawk.

PRASM is a measurement of sales relative to the amount of capacity offered by the airline. It's calculated by dividing passenger revenue by available seat miles (capacity). The higher the PRASM, the more money made per available unit of capacity.

It's an indicator of the productivity of the airlines' routes in generating revenue. JetBlue indicated the decrease of its PRASM during the quarter could be attributed to increased competition from competitors as well as increased capacity on its end, the airline said during its earnings call.