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Apple Inc. Message Board

wgrsh 44 posts  |  Last Activity: Sep 22, 2016 3:49 PM Member since: May 11, 2005
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  • Reply to

    Big News!

    by unclespeaking Sep 22, 2016 2:45 PM
    wgrsh wgrsh Sep 22, 2016 3:49 PM Flag

    Unc ... there is no "free lunch"

  • Reply to

    VA Drop

    by cavalier2015 Sep 22, 2016 1:21 PM
    wgrsh wgrsh Sep 22, 2016 2:12 PM Flag

    There is an article about the FA's late yesterday afternoon ...

  • Reply to

    VA Drop

    by cavalier2015 Sep 22, 2016 1:21 PM
    wgrsh wgrsh Sep 22, 2016 1:32 PM Flag

    The other day, it seemed like you were losing faith ... dead give away. It appears people may be worried about what was said with the DOJ, rightfully or wrongfully.

    I always felt that JBLU and HA would get together (and VA), but that would make for a real barbell route system without VA to fill in the middle. HA's 330's could add some transatlantic as well.

  • Reply to

    Cramer

    by cavalier2015 Sep 21, 2016 8:58 PM
    wgrsh wgrsh Sep 22, 2016 12:47 PM Flag

    John ... agree with you generally. The way I look at it (sometimes) is that if you take a no growth PE for earnings "over the business cycle" ... what is it? ... say 15? Right now the market is saying AAL will average only $35/15 in earnings "over the business cycle", or about $2.33/year on average. Will AAL beat that over the business cycle. Parker has repeatedly referred to what can be earned over the business cycle ... the market isn't believing him yet.

    Parker feels that AAL can make more than their cost of capital over the business cycle, is aiming to have the highest pre-tax margins, and feels AAL will not lose money in a recession. So, do earnings work out to be $2.33/share over the business cycle?

    Eventually, the industry will get organic growth, growing revenue at the GDP rate (plus adjustments for costs), and earnings at the GDP rate once margins settle out.

  • Reply to

    Cramer

    by cavalier2015 Sep 21, 2016 8:58 PM
    wgrsh wgrsh Sep 22, 2016 11:23 AM Flag

    Generally, decreasing revenues are bad (agree with all on that one), but decreasing revenue with a decreasing large cost area, is different than just decreasing revenue, and everyone here has talked about that. AAL said that 2016 Q1 was a prasm trough, and it was easy to calculate when revenue would go flat. So, I assume the market knows that and has calculated that as well. Consequently, I feel, it is margins to watch ... the market knows when revenues will stop declining, but the market doesn't know where margins will settle. Regardless ... whatever it takes to change sentiment.

  • Reply to

    Cramer

    by cavalier2015 Sep 21, 2016 8:58 PM
    wgrsh wgrsh Sep 22, 2016 10:11 AM Flag

    Revenue will soon stop shrinking, and then it's just a matter of what level margins settle at.

    It's possible that there could be flat yoy revenue in Q4, more certainly in Q1, and small growth through 2017 ... higher growth if cost pressures require fare increases depending what margins the industry decides to hold.

  • Reply to

    So what's the news?

    by iahphx Sep 7, 2016 9:43 AM
    wgrsh wgrsh Sep 7, 2016 10:42 AM Flag

    // This game can be quite irrational //

    Well, you've been saying it is somewhat irrational, but, I feel, and you also if I've been hearing you correctly, eventually the market figures it out. Fundamentally, this board has been talking about it ... the market wasn't cooperating. Maybe it is just a matter that it is going to be harder going forward to keep calling something good, bad. I could feel the pressure building ... something was going to happen ... I'm glad it was in this direction, and it should have been.

    Really, when the negative articles start talking about babies throwing up ... they are scraping the bottom of negativity.

  • Reply to

    So what's the news?

    by iahphx Sep 7, 2016 9:43 AM
    wgrsh wgrsh Sep 7, 2016 9:58 AM Flag

    Not reverse .... inverted.

  • Reply to

    So what's the news?

    by iahphx Sep 7, 2016 9:43 AM
    wgrsh wgrsh Sep 7, 2016 9:58 AM Flag

    It was just a matter of time ... and there was a trigger. The XAL and transports appear to be putting in reverse head and shoulders.

  • Reply to

    So what's the news?

    by iahphx Sep 7, 2016 9:43 AM
    wgrsh wgrsh Sep 7, 2016 9:52 AM Flag

    The industry is back in favor ... we'll see.

  • Reply to

    Dumb, Dumb, Dumb!

    by unclespeaking Aug 16, 2016 12:10 PM
    wgrsh wgrsh Aug 16, 2016 1:33 PM Flag

    //LUV still hasn’t disclosed its 2017 capacity growth//

    Kelly did say something about it in either the Q1 or Q2 CC. Mentioned that they were no longer going to keep their older planes as the new ones came online, and they were thinking about getting rid of the old before the new came online, which meant they would go to flat ASMs and possibly negative (but that could be just over a quarter or so). I understand what the Fish are saying ... Kelly didn't speak to the whole year.

  • Reply to

    My PT

    by cavalier2015 Jul 27, 2016 5:05 PM
    wgrsh wgrsh Jul 27, 2016 10:13 PM Flag

    I said Keay said 8.5 PE for pretax, not me. Most analysts had some pretty high PTs, and probably were slightly lower than Keay's 8.5. You do realize AAL made $4.2B in 2014 ... divide that by 700 shares and multiply by 8, or 8.5, what p/s do you get? True, people pushed for higher when fuel dropped, but then as you well know prasm became the new question mark. Actually, it was appropriate that prasm dropped as fuel dropped, if margins weren't going to go through the roof. And prasm dropping provided the perfect scenario (or story) that the airlines were back to their old ways ... so, the perfect excuse for volatility (or is it opportunity)

    Well, the airlines now are starting to set up capacity to make fare adjustments ... if they manage fares going forward the fear of the "old ways" will dissipate and it might surprise people. Most airlines are setting up for that to happen. And the adjustments are coming this fall/winter, not tomorrow. Who knows when the market will notice.

    Q1 was a low for fuel ... prasm better be done dropping (except for YOY comparisons for another quarter or so)

  • Reply to

    My PT

    by cavalier2015 Jul 27, 2016 5:05 PM
    wgrsh wgrsh Jul 27, 2016 8:18 PM Flag

    // but untaxed eps misled everyone imo...//

    You have a short and selective memory, cav. The whole board a few years ago was talking about an 8 PE pretax and 12 PE for taxed. And the analysts were saying the same thing. I think it was Keay that said 8.5 PE pretax. No one was misled.

  • Reply to

    Why are 2017 estimates so low?

    by dmspilot00 Jul 27, 2016 10:33 AM
    wgrsh wgrsh Jul 27, 2016 11:29 AM Flag

    Just adding to unc ... AAL guided to 2014 to 2015 margins going forward. Essentially, $4.2B to 6.2B. This year they should hit near the midpoint, and for 2017 I'm deferring an estimate until I see what the industry does with fares and capacity this fall ... and also what bears said about the fish thinking about fuel going to $60 (that'll make the airlines adjust). Anyway, the industry in general has been making those margins since 2013 (LCC did that in 2013 pre-merger). That's going to be almost 5 years of consistently good margins, during generally weak economic times, and no credit for it. Somebody will notice someday.

  • Reply to

    Ted reed article

    by dca1186 Jul 26, 2016 10:51 AM
    wgrsh wgrsh Jul 27, 2016 10:19 AM Flag

    //switch from PRASM to RASM forecasts//

    With the credit card deal done, RASM get a YOY boost. With AAL saying Q1 PRASM was trough (12.43 cents), I worked out a while back that this quarter shouldn't be down more than 5%, and in Q2 their guide was beating that by about 1.5%, which they bettered. Anyway, Q3 guide down 3.5 - 5.5% wasn't surprising, actually in line. Q4 will only be down slightly and with credit card income they could be flat/(positive?) RASM. With capacity cuts in the fall, could even go positive. At least Q1 will be flat to positive YOY.

  • Reply to

    Ignore appears to be back

    by johnb_dca Jul 26, 2016 2:00 PM
    wgrsh wgrsh Jul 27, 2016 10:09 AM Flag

    iahphx ... I read that Verizon was going to drop Yahoo's news, finance, even mail, etc and use AOL's sometime in 2017. So, all I can say is that it has been fun all these years ... appreciate the board and all the comments. If anyone knows where else to go, since even "conversations" may go away ... post the sites.

  • Reply to

    Maybe parker does know something after all

    by dca1186 Jul 13, 2016 11:22 AM
    wgrsh wgrsh Jul 13, 2016 10:14 PM Flag

    // That would mean you know their earnings //

    Bears ... just a discussion of what their cash may look like down the road. Just assuming low end of margin guidance going forward to calculate a profit, looking at their capex, and required principal payments every year ... (taking into account the non-cash taxes for as long as they last, adding back depreciation, etc. etc. etc.)

    And unc ... as long as the debt is mostly equipment trusts related to aircraft capex let's not say they are buying the aircraft with OCF ... (I know it is all fungible) ... let's talk the CF. And when they say they can renew the debt, I think that is afterwards and they negotiate new debt based on the residual value.

  • Reply to

    Maybe parker does know something after all

    by dca1186 Jul 13, 2016 11:22 AM
    wgrsh wgrsh Jul 13, 2016 3:51 PM Flag

    unc ... the point of the discussion (or the direction the discussion was going) was to compare future sources of cash, added to current cash, and look at how that compares to the required debt payments over the next 3-4 years. Personally, I don't think it is a problem if they hit the low end of what they think their margins will be, but to a degree, I think this issue is at least part of the "short story". How low can margins go (and for how long) before it is a problem?

  • Reply to

    Maybe parker does know something after all

    by dca1186 Jul 13, 2016 11:22 AM
    wgrsh wgrsh Jul 13, 2016 3:30 PM Flag

    // By the way, Cash ain't "Profit", Cash is Cash. //

    Do you really think I don't know the difference? The implication of "have cash (profit)" was that profit is a source of cash, not your backward interpretation of cash is a source of profit. That was your backward interpretation not mine uncle.

  • Reply to

    Maybe parker does know something after all

    by dca1186 Jul 13, 2016 11:22 AM
    wgrsh wgrsh Jul 13, 2016 3:11 PM Flag

    Thanks for the future capex.

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