Gogo, Inc. Beats Q1 Earnings Estimates; Shares Rise

In-flight Internet service provider Gogo reported better Q1 numbers than expected. The resulting share price jump softens recent fears about new competition somewhat.

May 12, 2014 at 10:12AM
Gogo Logo

Source: Gogo.

Gogo (NASDAQ:GOGO)  reported results for the first quarter of 2014 this morning. The company beat analyst targets across the board, and shares jumped as much as 12% higher on the news.

The in-flight Internet service specialist saw first-quarter revenue rise 35% year-over-year to $96 million. Equipment sales led the way with a 48% jump. An equally rapid rise in operating costs led to a net loss of $0.20 per share, slightly worse than the $0.17 non-GAAP loss per share reported in the year-ago period.

The numbers beat analyst estimates on both the top and bottom lines.

The number of aircraft with Gogo services installed increased by 9.5% year-over-year, while revenues per aircraft jumped 19% higher. The company said it ended the quarter with 2,056 aircraft online, up from 1,878 at the end of March last year. 6.9% of passengers exposed to a Gogo connection paid for the service this quarter, up from 6.2% a year ago.

Looking ahead, Gogo held its full-year guidance unchanged. The $400 million to $422 million revenue guidance range is broadly in line with analyst estimates.

"We expect continued strong growth in revenue fueled by strong secular trends and passenger adoption of new services," said Gogo CEO Michael Small in a prepared statement. New services include a recently unveiled Ku-band satellite uplink and the rollout of fourth-generation air-to-ground technologies.

This morning's price surge notwithstanding, Gogo shares have lost half of their value year-to-date, as investors reacted to new competition entering the in-flight connectivity market. Gogo's management doesn't seem overly worried about rivals, though. "Our technology leadership, operational expertise, and suite of communications solutions continue to set us apart both in North America and internationally," Small said.

Anders Bylund has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days.

We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

The amazing thing is, while Buffett may be nervous, the rest of us can invest in this new industry BEFORE the old money realizes what hit them.

KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

Don't let that happen again. This time, it should be your family telling you, "I can't believe you knew about and invested in that technology so early on."

That's why I hope you take just a few minutes to access the exclusive research our team of analysts has put together on this industry and the one stock positioned to capitalize on this major shift.

Click here to learn about this incredible technology before Buffett stops being scared and starts buying!

David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

©1995-2014 The Motley Fool. All rights reserved. | Privacy/Legal Information