What happened

Shares of wireless "hotspot" specialist Boingo Wireless (WIFI) are down 18.9% as of 1:20 p.m. EDT Friday. That's hardly the response you'd expect investors to have, though, to a stock that just beat earnings estimates handily in its third-quarter earnings report (released last night).

According to Wall Street, Boingo was "supposed " to lose $0.10 per share on sales of only $63.8 million last quarter. Instead, Boingo reported yesterday that it lost only one penny per share and did $65.3 million in business -- beating on both earnings and sales.

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Sadly, Boingo got no bounce out of today's earnings beat. Image source: Getty Images.

So what

So what went wrong? Boingo grew its sales more than 21% year over year, exceeding one Wall Street target. And it did so while losing less money than feared. (Boingo also lost a whole lot less money in this year's third quarter than it did in last year's -- when losses were $0.09 per share). Boingo also reported free cash flow for its Q3 -- $8.5 million worth of the green stuff, versus cash burn of $2.7 million in the year-ago quarter.

I see two possible reasons for investors' disappointment. First, Boingo's beat, while undeniable, wasn't quite as strong as its performance last quarter, when Boingo posted even stronger sales growth and a bigger earnings beat.

Now what

But second, Boingo also issued new guidance yesterday. In it, management predicted that Boingo will end this year with losses of between $0.12 and $0.24 per diluted share on sales of $243 million to $250 million. Assuming the midpoint in that guidance will be closest to the mark, Boingo appears likely to "miss sales" in Q4 -- because Wall Street has been looking for revenue of $249 million.

On the plus side, taken at the midpoint, Boingo's likely loss of $0.18 per share will be a lot better than the $0.24 loss that Wall Street is anticipating. It's just a pity that right now, investors seem to be overlooking that fact.