Netjet Profit 143 million

[RNObased]

Don't mistake this as disrespectful to NJ, but: Have you looked at what NetJets charges their clients? If they couldn't make money at those client rates, I would be worried. Nothing against NetJets, but many of the NetJet-Setters could get the same product (safe transportation) with their local charter company, for 40% less than they pay NJ to do the job. Yes, some people need the NJ fleet flexibility. The good news is that rich america hasn't caught on to the fact they are getting ripped off in many instances by the big operators. ARGUS helps the cause convincing people to only fly NJ, Flex, etc. You guys deserve a big chuck of that profit, if it indeed is there. I hope the best for you guys - good luck!

AZT

AZ, no disrespect to you, but you don't know what you are talking about.
Having flown jet charter for many years before coming to NJA it is night and day. There is always pressure to keep the charter jet in the air. At NJA no such pressure, if it is broke I write it up. Never asked, "Are you sure it is broke???"

Alway the ability of NJA to cover trips after there is a write up is mind blowing. I wrote a jet up 1hr before departure a couple of tours ago, another jet was taxing in to take the trip before I was done with the write up paper work. Is that always the case, NO. But the owner gets where they are going in a timely manner, can you say that about charter??? Probably not.

 

[gunfyter]

I am disappointed FamilyGuy and YipPilot and Publishers have not chimed in with their comments....

Probably thought we would forget their predictions of gloom and doom.

 

[notaNJApilot]

We have the planes, it's the pilots that we were short on in the past...hence last year's hiring spree.
Does anyone know how much NetJets is worth? Let's say $2B. $143M out of a $2B company is 7% profit. Is that enough for Buffet to keep us? FWIW, wikipedia says Berkshire Hathaway "averaged a phenomenal 25%+ annual return to its shareholders for the last 25 years".

 

[DO-82 driver]

Don't forget that NJA is the biggest and the best in the fractional industry.

Buffet, or his heir, will never let that go.

This "cash cow" has alot of high quality milk in her.

 

[gunfyter]

If $2B invested then $143M is 7% return.

If $1B invested then $143M is a 14% return...PLUS the Appreciation of the asset from $1B to $2B if $1B was invested and the company is now worth $2B. Someone could probably figure out what the appreciation has been.

My house appreciated more than the total of alll the mortgage payments in the last 3 yrs but I have not received any income from it.... But I still think I am getting a good return.

I think Stocks trade normally at a company valuation of 15... up to 20 times earnings.

That would make NJ worth 143M X 15 = $2.1B to 143M X 20 = $2.8B.

If we could push profits to $200M to $250M ... then at 15 times earnings the company could be worth $3B to $3.75B.

BRK could increase in value $1B to 1.75B on NJ in just one yr. 50 to 80% Asset appreciation! PLUS the $200M in Income! Thats A LOT better than the 25% Berkshire returned on average!

I think this increase is achievable because there is a lot of inefficiency that can and will be reduced. I wish there was a NJ stock.... I could buy.

Mad Money KRAMER says BUY BUY BUY!

 

[FamilyGuy]

I am disappointed FamilyGuy and YipPilot and Publishers have not chimed in with their comments....

Probably thought we would forget their predictions of gloom and doom.

I wasn't aware that I had made any predictions of doom and gloom. Maybe you could show me where I did that?

As for my comments on the reported profit, I think the one important point no one has talked about is that ALL NetJets operations were profitable in 2006 - including Europe.

That fact, coupled with the great work of everyone - pilots, mx, flight center - is what drove the profit.

The challenge will be in following that performance up in 2007. For the first two months the availability is down and the break rate for the aircraft is up. That will drive more subcontract and reduce profits for the year.

 

[FamilyGuy]

If we could push profits to $200M to $250M ... then at 15 times earnings the company could be worth $3B to $3.75B.

BRK could increase in value $1B to 1.75B on NJ in just one yr. 50 to 80% Asset appreciation! PLUS the $200M in Income! Thats A LOT better than the 25% Berkshire returned on average!

I think this increase is achievable because there is a lot of inefficiency that can and will be reduced. I wish there was a NJ stock.... I could buy.

Mad Money KRAMER says BUY BUY BUY!

I like the optimism, but you're off base here.

Even if NetJets could increase profits to the $200-$250 Million range (very big if) that one year performance would not come close to matching the Berkshire 25% average annual return that Buffett has generated since 1964.

I do agree with you that there is still a lot of inefficiency around here that can be reduced. Things are slowly getting better, but there's still a lot of work to be done.

As for the NJ stock, why not buy the Berkshire B shares? Yes, its pricey at $3,644 per share, but with that increased paycheck and retro you could probably pick up a couple shares.

 

[gunfyter]

Oh ye of little faith....I am sticking with the 200 to 250 M $$$.B- shares. I don't think will go up as much as NJ stock would.As the training bottleneck gets fixed and the cost reduction of combining NJI and NJA will produce 10's of millions in savings.... Adds right onto the bottom line more directly than increased revenues.

 

[RTRHD]

Oh ye of little faith....I am sticking with the 200 to 250 M $$$.B- shares. I don't think will go up as much as NJ stock would.As the training bottleneck gets fixed and the cost reduction of combining NJI and NJA will produce 10's of millions in savings.... Adds right onto the bottom line more directly than increased revenues.

Step away from the crack pipe Gun. We have drug testing man what are you thinking?

 

[Avalanche]

Don't mistake this as disrespectful to NJ, but: Have you looked at what NetJets charges their clients? If they couldn't make money at those client rates, I would be worried. Nothing against NetJets, but many of the NetJet-Setters could get the same product (safe transportation) with their local charter company, for 40% less than they pay NJ to do the job. Yes, some people need the NJ fleet flexibility. The good news is that rich america hasn't caught on to the fact they are getting ripped off in many instances by the big operators. ARGUS helps the cause convincing people to only fly NJ, Flex, etc. You guys deserve a big chuck of that profit, if it indeed is there. I hope the best for you guys - good luck!

AZT

Nothing like a good charter broker to put you in a reputable local charter aircraft no matter your location.