Why Global Eagle Entertainment Inc. Shares Took Flight Today

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of Global Eagle Entertainment  (NASDAQ: ENT  )  rose 12% early Friday, then settled close up around 7% after the in-flight content and connectivity specialist released solid first-quarter results.

So what: Quarterly revenue rose 55%, to $86 million -- compared to analysts' estimates for revenue of $85.4 million -- which translated to a slightly narrower net loss of $26.3 million, or $0.47 per share. Meanwhile, first-quarter adjusted earnings before interest, taxes, depreciation, and amortization swung to a $5.1 million gain from a pro forma $0.5 million loss in the same year-ago period. 

Now what: Global Eagle Entertainment declined to provide specific forward guidance, but instead stated: "We expect continued growth through the remainder of 2014. Drivers of increased revenue and EBITDA include growth of our content customer base, continued installations of our connectivity systems, the full year impact of the acquisitions of PMG and IFE Services made in 2013, and the realization of integration synergies over the second half of the year."

I'm personally having a tough time getting excited about Global Eagle's business given its continued significant losses. Still, Global Eagle should have plenty of time and resources as it works toward profitability, with more than $250 million in cash -- or roughly a third of its overall market capitalization -- and less than $8 million in debt on its balance sheet at the end of the quarter. For now, I'm adding Global Eagle to my watch list to keep tabs on its progress during the next few quarters.

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