Please ensure Javascript is enabled for purposes of website accessibility

Why Shares of Gogo Popped Today

By Timothy Green - Dec 11, 2018 at 1:17PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The airplane internet provider has solved its de-icing problem.

What happened

Shares of Gogo (GOGO 4.16%) jumped on Tuesday after the aviation broadband-connectivity provider announced that its efforts to protect against de-icing fluid contamination showed positive results. The stock was up about 8% at 12:30 p.m. EST, after being up as much as 17.1% earlier in the day.

So what

Gogo has made de-icing modifications to its 2Ku system on nearly 95% of its North American fleet, or roughly 600 aircraft. The modifications are aimed at preventing any degradation caused by the use of de-icing fluid. As of Dec. 10, the company has experienced no incidents of 2Ku system degradation on aircraft with the modifications installed.

The Gogo logo on a plane.

Image source: Gogo.

Gogo's de-icing update is in response to investor inquiries that the company received regarding recent winter storms. "Developing and deploying a de-icing solution has been the top priority of our operational and engineering teams since last winter," said John Wade, president of Gogo's commercial aviation division.

Availability of Gogo's 2Ku system across the entire fleet during the first 10 days of December was 98%, up from 92% in the same period last year.

Now what

Minimizing system downtime is certainly important for Gogo's growth prospects. The company grew revenue by 26% in the third quarter, and it expects full-year revenue to grow by about 29%, based on the midpoint of its guidance.

Gogo isn't profitable, but it's moving in the right direction. Through the first nine months of 2018, it posted an operating loss of $17.2 million, down from a loss of $49.8 million in the prior-year period. Gogo is expected to report its fourth-quarter and full-year results sometime in February.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Gogo Inc. Stock Quote
Gogo Inc.
$18.26 (4.16%) $0.73

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning service.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 05/19/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.