Gogo (GOGO 10.25, +1.13) has jumped 12.4% in pre-market after beating fourth quarter expectations and issuing upbeat guidance.
The provider of in-flight connectivity reported a slimmer than expected fourth quarter loss of $0.34 per share on a 16.1% year-over-year jump in revenue to $160 million, which was just ahead of expectations.
Gogo's service revenue checked in at $138.89 million, which represented 86.8% of total revenue. Service revenue was up 20.0% year-over-year with commercial aircraft online increasing 14.0% to 2,943 and ATG business aircraft online rising 20.0% to 4,172. Customer usage increased across all segments.
The company noted that 2Ku systems were installed in more than 130 jets at the end of the quarter, and installations are expected to accelerate significantly with 450-550 planned for 2017 while another 650-750 installations are expected to take place in 2018.
The planned acceleration in 2Ku installations means that the company now expects to begin generating positive cash flow in 2019, one year sooner than previously expected. Cash needs are expected to decline significantly due to a substantial decline in average investment per 2Ku installation.
For fiscal year 2017, Gogo expects to generate revenue between $670 million and $695 million, which is ahead of current market expectations.
Gogo's above-consensus results and upbeat outlook have lifted the stock to levels from the end of 2016.