It happens to every company sooner or later: Somebody sets a mark for quarterly earnings or monthly sales numbers, and the company misses that goal. Whether the company's own management, Wall Street analysts, or the market at large set the target, that miss can have serious consequences. Sometimes, an earnings stumble is a signal to sell, but digging in the dirt is also a good way to find turnaround candidates while they're getting beaten down. Today, we see that the sky isn't so blue, our clients aren't all that thin, and the Big Apple seems a bit shrunken.
Jetting the blue skies
Let's start with low-cost airline JetBlue
On other counts, JetBlue whooshed past its targets. Members of management wanted a 7% operating margin on the fourth quarter, and it delivered 10.2%. They wanted to end the year with $650 million in cash and got $699 million -- albeit with $514 million of additional long-term debt as well.
Missing the capacity target may not be such a bad thing -- available miles grew faster than the revenue-generating passenger miles, anyway, and the load factor dropped 1.4 percentage points to 79.7%. The company is growing its serviceable network very quickly, adding new destinations and routes every month. But the average ticket price increased about 20% over last year to make up for rising fuel prices, and I can see how that leads to a challenge when it comes to keeping passengers' behinds in the seats.
Other than JetBlue and the perennially profitable Southwest Airlines
Oh, where is my Neoware?
We're moving on to thin-client specialist Neoware
Neoware CEO Klaus Besier explained that a few large clients reduced their order volumes, and that the company is going through an expensive restructuring process. His stated goal is to "take advantage of growth opportunities in the market, as well as taking market share from our competitors."
The company counts green-screen maker Wyse among its rivals, alongside powerhouses such as IBM
It's a small world, after all
Let's finish this roundup where we belong -- at the virtual trading floor of the New York Stock Exchange
The integration of all-digital trading platform Archipelago is costing the NYSE in the short term but promises to make up for that over the long haul with more efficient trades. That should increase the order volume, while making the market more attractive for future listings, among other things. The company is changing fast today, and it's not done yet; it recently claimed a 5% stake in India's largest public exchange and announced a partnership with the Tokyo Stock Exchange, and the merger with pan-European trading floor Euronext is pending.
We're looking at the creation of the first multicontinental trading platform here. It's making our Global Gains staff giddy with glee, but it's sending rival Nasdaq
NYSE became a Rule Breakers recommendation by virtue of buying a Rule Breakers pick, but NYSE appears to keep the iconoclastic spirit alive and well. It's an exciting time to watch the markets evolve, and this company looks poised to take a global leadership position. The occasional stumble along the way can be forgiven.
So long, for now
Some of these underperformers are victims of larger circumstances, while others might have only themselves to blame. It's up to you to decide which down-on-their-luck companies should be able to pull themselves up by the bootstraps, and which really are stuck in the mud. Come back next week, and we'll take a look at another batch of mishaps and disappointments. It'll be fun and educational.
Further Foolish reading:
- The Best Value Stocks
- How to Make a Small Fortune
- This Just In: Upgrades & Downgrades
- Buy Before It's Too Late
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JetBlue and Embraer Empresa are two of the picks on the Motley Fool Stock Advisor scorecard, and NYSE Group is indeed a Rule Breaker. Find out more with a free 30-day trial subscription to either service.
Fool contributor Anders Bylund is a JetBlue shareholder but holds no other position in the companies discussed this week. The Fool has a disclosure policy, and you can see his current holdings for yourself.