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 regional air carrier SkyWest
So what: It's going to be hard to get investors excited about your quarter when you report earnings per share of $0.00. Particularly when investors were prepped by Wall Street analysts to expect $0.13 in per-share profit. Sure, much of the lackluster bottom line was because of certain costs, including overhauling some engines, unexpected staffing needs, and charges related to its acquisition of ExpressJet. But even when those costs are backed out, the quarter still only showed a short-of-estimates profit of $0.11 per share. Revenue was likewise lower than expected at $955 million versus the $966 million estimate.
Now what: Owning an airline means owning a business that's highly capital intensive and in a very cutthroat industry. As a result, it's tough to get this Fool too excited about almost any airline company. Many of the costs that investors might want to look at as "one-time" costs in the quarter were related to maintenance -- and really very much part of the ongoing business expenses -- and therefore underscore the fact that this is simply a high-cost business. There may be reason to like SkyWest more than some of the larger carriers, but between its highly indebted balance sheet and mediocre returns on capital, for long-term investors there are plenty of other stocks that are more attractive.
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Fool contributor Matt Koppenheffer does not have a financial interest in any of the companies mentioned. You can check out what Matt is keeping an eye on by visiting his CAPS portfolio, or you can follow Matt on Twitter @KoppTheFool or Facebook. The Fool's disclosure policy prefers dividends over a sharp stick in the eye.