Gogo In-Flight Internet Soars on Earnings Beat: StockTwits

NEW YORK (TheStreet) -- In-flight Internet provider Gogo (GOGO) soared Monday morning on the wings of a Wall Street beat. And StockTwits' investors believe shares will continue to fly as the company tops competitors.

$GOGO great qtr and a great cc. Run shorty run

? traderelite (@traderelite) May. 12 at 09:08 AM

Sentiment on the Gogo is 85% bullish, according to StockTwits analytics. The stock climbed 8% Monday before the open, during the company's first quarter earnings conference call. It was the top trending ticker on StockTwits.com. At 11:30 a.m., the stock was at $12.98, up 8.8% for the day.

$GOGO Time to buy more this is next Netflix in few years.

? Satya (@Samlal) May. 12 at 08:52 AM

Gogo reported a smaller-than-expected earnings-per-share loss of 20 cents before the bell Monday on $95.7 million in revenue. The results surpassed analyst consensus estimates for an EPS loss of 25 cents on $94.58 million in sales. The company maintained guidance of between $400 million and $422 million in total revenue for the year. It expects adjusted EBITDA of between $8 million and $18 million.

But some investors were disappointed that Gogo didn't announce a new airline deal during the conference call.

$GOGO Results r mildly better than estimates - guidance leaves me wanting more - was hoping for announcement of new partnership

? Omar (@TheStacks) May. 12 at 08:59 AM

Gogo management is working fast to ink deals with new airlines and increase its Internet speed and coverage before competitors do. Recently, Gogo inked a deal with Air Canada to supply Internet for its North American fleet. Gogo will also test its new 2Ku band satellite technology on Air Canada flights, which promises to deliver up to 100 megabits per second (mpbs for short). Gogo management says that speed will top everyone else in the industry.

"We expect to see significant capacity increases with the introduction of our GTO and 2Ku airborne antennas, both of which are capable of delivering industry leading speeds of 70mpbs to the aircraft initially, and up to 100 mbps when spot beam Ku satellites are launched," said Gogo CEO Michael Small in a press release.

About 38% of domestic U.S. flights offer in-flight Wi-Fi, according to a July report by RouteHappy, a flight ratings and analytics site. Delta (DAL), Southwest (LUV) and U.S. Airways (AAL) offer Wi-Fi on the most flights -- though Virgin America and AirTran have their entire fleets outfitted for Wi-Fi.

Gogo is the Internet provider for Delta, U.S. Airways, AirTran and Virgin America. Southwest uses Gogo competitor Row 44, a privately held company. Gogo also provides Wi-Fi on select American Airlines (AAL), Air Canada, Frontier Airlines (RJET) and United Airlines (UAL) flights. LiveTV, a subsidiary of JetBlue, provides Wi-Fi on JetBlue  (JBLU) flights using ViaSat satellites. Panasonic Avionics will provide in-flight entertainment and communication on Air Canada's new Dreamliner fleet.

Gogo management promised more deals to come in the near future that will solidify its position as the leading Wi-Fi provider.

$GOGO Highly confident about signing new deals this year

? greggyg (@GregGmoney) May. 12 at 08:58 AM

$GOGO says they are the leader and will continue being the leader despite other competitors trying to do what they do.

? BUD ALLEN (@kickinwing) May. 12 at 08:46 AM

Gogo's cash-on-hand also concerned some investors. Gogo is still losing money as it invests in technology to increase in-flight Wi-Fi speed and coverage to the level necessary to fuel industry-wide adoption. As of March 31, Gogo had $219 million in cash and cash equivalents. That was down from $266.3 million in December.

$GOGO they don't have enough spectrum they need to raise money

? Vinesh Guruwara (@vpg_999) May. 12 at 09:31 AM

But the cash reduction didn't cause widespread alarm. And with a price to sales ratio of 3 times and analyst consensus calling for 25% upside in the stock, a majority of investors said they would jump on board Gogo at this level.

up 8% pre-market, looking to buy today $GOGO

? investorguy (@investorguy) May. 12 at 09:17 AM

At the time of publication the author held no positions in any of the stocks mentioned.

This article represents the opinion of a contributor and not necessarily that of TheStreet or its editorial staff.

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