Hahahahhahahahahahahaha

 

So the airline reports a huge profit and the stock goes down. Can someone explain investing to me please???

 

26.9% margin and revenue that beat estimates and our stock is down another 6.65% (and dropping) this morning. *** am I missing here?

 

Further proof it's all bull**** and instant gratification is more important than a solid business plan?

 

It is bull****. 26.9% and somehow that's a major dissapointment to the street? *** would satisfy these analysts?

I'm so glad I bought at 43 thinking that was rock bottom lol.

 

Investing is a long term activity. Once we hit 400 a/c your investment will skyrocket!

 

Haven't listened to the analysts comments yet, but the reason for the stock to continue dropping is around the 11:30 mark.

Spirit, as the call has stated has been an airline looking for margins in the high teens, with the margins of 26.9% reported this quarter, the guidance for the future is back to the high teens. That coupled with decreasing RASM and decreasing revenue guidance, with ticket prices declining, it's only natural that the stock will drop. I think Spirit is pretty conservative in its guidance, so I can see future margins around 19-22% just as a guess.

 

Jblue is down 7% as well after beating estimates

 

What is so hard to understand?

Future expectations. Less growth for '16 vs '15. 2016 Q1 expected to be less profitable. The call was full of "uncertainty" type of questions. One guy even asked if we are going to defer orders.

Spirit stock has always been about higher than average industry margins combined with a high rate of growth. This is clearly questioned by the analysts. Kapish?


edit:
Few other interesting things that caught my attention were:

- Spirit operates under the assumption that there will not be a labor agreement with either unions in 2016. Not that "assumptions" are meaningful but they sure did not paint an optimistic picture either.
- No extra plane orders anytime soon. The growth is right where they want it. There goes your 2.5 year upgrade for new hires.
- Planes are indeed going to be returned on schedule. Many of us thought they were going to keep them. It does not look like it.
- DFW will no longer grow and has not been growing since 2013. (This was news to me but I do live in a cave.)
- Something like "we will do more of what we are doing just not where we are doing it right now"... This was in reference to growing existing markets.

Overall I thought they answered the questions well.

 

One thing that comes across is the slight bit of frustration from Ben and Ted over the analysts comparisons between legacy and Spirit. Ben continuously tries to downplay RASM due to the high growth, high utilization and bigger aircraft. I tend to agree, I don't think the analysts are getting the full picture.

Other interesting aspects were the thought of the potential size of the ULCC market here in the US, the fact that open negotiations won't reflect in 2016 guidance, the fact that 321s are cheaper to operate, and Ben's thoughts on airports and how the concessionaires in those airports love us.

Best comment so far: "big cities have rich people and ..... less rich people".