Gogo, Inc. Earnings: What to Expect Thursday

Gogo (NASDAQ: GOGO  ) will release its quarterly report on Thursday, and investors have been hugely optimistic about the growth prospects for the in-flight Internet service provider, sending shares skyward since its mid-2013 IPO. Yet even though the company has successfully gotten itself onboard planes for Delta Air Lines (NYSE: DAL  ) , United Continental (NYSE: UAL  ) , American Airlines Group (NASDAQ: AAL  ) , and other carriers, the big question is whether Gogo can hold competitors at bay and maintain its huge 80% market share in North America.

For years, airplanes were the dark spot of the Internet world, where connectivity was unavailable and even phone service was limited to extremely expensive in-flight specialty phones. But the demand to stay connected has opened up a lucrative opportunity, and Gogo has jumped into the market to try to capitalize. As Gogo tries to make the most of its first-mover advantage, though, it needs to keep its eye on potential competition while cementing long-term deals to sustain its growth. Let's take an early look at what's been happening with Gogo over the past quarter and what we're likely to see in its report.

Gogo's test aircraft. Source: Gogo.

Stats on Gogo

Analyst EPS Estimate


Year-Ago EPS


Revenue Estimate

$85.45 million

Change From Year-Ago Revenue


Earnings Beats in Past 4 Quarters


Source: Yahoo! Finance, S&P Capital IQ. * Unadjusted for change in shares outstanding after IPO. ** In two quarters since IPO.

Will Gogo earnings keep surprising investors?
Analysts have pulled back on the throttle on their views on Gogo earnings in recent months, keeping fourth-quarter estimates steady but widening loss expectations for the full 2014 year by about 5%. The stock has lost altitude recently, though, falling more than 30% since early December.

Gogo's third-quarter results brought positive momentum to the stock, with revenue climbing by almost half and its count of aircraft on which it offered its service having climbed by 24% to top the 2,000 mark. Positive guidance for full-year revenue was also encouraging, eclipsing its previous range of sales guidance by 3% to 6% and pointing to further long-term growth across the globe. So far, domestic airlines have been key partners for Gogo, with Delta, United, and American all offering the service on certain aircraft. But the company signed its first foreign partner, Japan Airlines, to a contract during the quarter, showing Gogo's intent to take full advantage of the international opportunity in its business as well.

But Gogo isn't counting just on providing Internet access for all of its prospective revenue. Gogo also got FAA approval to install its Ku-satellite technology onboard some Boeing aircraft, opening the door to its Gogo Vision in-flight entertainment service. With plans to offer exclusive video content, Gogo hopes to attract more customers to take advantage of its services. In addition, just last week, the company unveiled its in-flight phone platform, potentially opening the door to more readily available voice and text communication as well.

With these opportunities, a share-price decline might seem unwarranted. But in December, private equity firm Ripplewood Holdings distributed all 27.6 million shares of its Gogo stock to its limited-partner investors, opening the door to sales that immediately caused a 15% drop in the share price.

Nevertheless, Gogo continues to work hard to maintain its dominance. With huge investments of money and employee headcount in technology, Gogo has remained the biggest player in the industry despite challenges from Panasonic and OnAir. As its new products roll out, Gogo should become an even more compelling proposition for airlines, passengers, and investors.

In the Gogo earnings report, watch to make sure the company remains on target to meet its lofty goals. With so much growth potential, Gogo needs to make sure it wastes no time in building up an insurmountable presence in the new industry.

Can you do even better than Gogo?
Gogo has great potential. But investors know that there's a huge difference between a good stock and a stock that can make you rich. The Motley Fool's chief investment officer has selected his No. 1 stock for 2014, and it's one of those stocks that could make you rich. You can find out which stock it is in the special free report "The Motley Fool's Top Stock for 2014." Just click here to access the report and find out the name of this under-the-radar company.

Click here to add Gogo to My Watchlist, which can find all of our Foolish analysis on it and all your other stocks.

Read/Post Comments (0) | Recommend This Article (0)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2873489, ~/Articles/ArticleHandler.aspx, 9/1/2015 6:33:31 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Dan Caplinger

Dan Caplinger has been a contract writer for the Motley Fool since 2006. As the Fool's Director of Investment Planning, Dan oversees much of the personal-finance and investment-planning content published daily on With a background as an estate-planning attorney and independent financial consultant, Dan's articles are based on more than 20 years of experience from all angles of the financial world.

Today's Market

updated Moments ago Sponsored by:
DOW 16,058.35 -469.68 -2.84%
S&P 500 1,913.85 -58.33 -2.96%
NASD 4,636.11 -140.40 -2.94%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

9/1/2015 3:59 PM
AAL $39.20 Up +0.22 +0.56%
American Airlines… CAPS Rating: ***
DAL $43.77 Down -0.01 -0.02%
Delta Air Lines, I… CAPS Rating: ***
GOGO $15.61 Down -0.28 -1.76%
GOGO INC CAPS Rating: ***
UAL $57.13 Up +0.16 +0.28%
United Continental… CAPS Rating: **