Ray Neidl raises his rating on AirTran

[gt1900]

Welcome to wallstreet boys..... There was once a quote some of you may have heard... Goes something like this "We have nothing to fear but fear itself". Isn't it amazing how one single analyst can swing stocks by so much??? Yet AAI is up 29.54% in after hours trading because of new coments by the same anaylyst that caused all of this in the first place... Most anyalists have upgraded AAI in the last couple months.. Yet one spells doome and gloome and look what the stock does... Pretty amazing isn't it... The market really is legalized gambling.. Some people know how to do it, and some people don't... Just like poker...

 

[PoorJetDriver]

Losing 4 carriers in just over one week makes everyone a bit nervous...

 

[Ty Webb]

Turn those machine back ON!

one single analyst can swing stocks by so much??? Yet AAI is up 29.54% in after hours trading because of new coments by the same anaylyst that caused all of this in the first place...

.. Some people know how to do it, and some people don't... Just like poker...

"Get those brokers back in here!! Turn those machines back ON!"

Too funny . . . . what a bunch of lemmings.

TW

 

[jonjuan]

As you know, that's an extremely unusual circumstance. I seriously doubt that we'll have anything of that sort happen during the quarter, especially after a press release was issued just yesterday that painted a rosy picture for investors. If that sort of information was forthcoming, then I seriously doubt management would have painted such a rosy picture in their latest press release. Most companies nowadays are too concerned about liability to try something like that.

General Electric painted a pretty rosy picture about earnings a month ago.

http://money.cnn.com/2008/04/11/news/companies/ge_earnings/index.htm?postversion=2008041112
NEW YORK (CNNMoney.com) -- General Electric - widely viewed as a proxy for the U.S. economy - posted a surprising first-quarter earnings miss Friday, deflating investors' hopes that the conglomerate could rise above a continued economic slowdown.
GE also lowered its full-year earnings guidance, and its second-quarter forecast fell short of analysts' expectations.
Shares of GE (GE, Fortune 500) - a Dow Jones industrial average component - tumbled about 12% in Friday trading, and the results sent the stock market tumbling.
GE reported net income fell 6% to $4.3 billion after reporting income of $4.6 billion in the first quarter of 2007.
Earnings from continuing operations were 44 cents per share, down from 48 cents per share a year earlier and well below the 51-cent-a-share consensus forecast of analysts polled by Thomson Financial.
"This came as a surprise to analysts, because the company reinforced its expectations for the first quarter in March," said Jefferies & Co. analyst Robert Schenosky.

 

[PCL_128]

General Electric painted a pretty rosy picture about earnings a month ago.

Go read some statements about what caused the earnings surprise. The Bear Stearns fiasco caused their financial services divisions to have huge problems very late in the quarter. That was an extraordinary event that changed their earnings at the very end of the quarter. Had that not taken place, they probably would have met earnings expectations. Unless some highly unusual and unpredictable event takes place for AirTran's business, there's no reason to believe that yesterday's press release was anything but accurate. We'll have the results for the quarter in another week.

 

[Andy]

PCL, using ARSs as a short term cash equivalent isn't that uncommon. The failure rate on these auctions have gone from near zero over the last decade to greater than 50% in 2008. They first caught my eye last year when I read about a Canadian company who put their short term money in an ARS which failed. It almost resulted in them being unable to supply their workers in the north with food for the winter.
The problems in the credit market problems are no longer extremely unusual.

I haven't pulled apart GE's earnings yet, but there are a number of problems, including their 2 cent miss on the non-financial side. Their forecast for the financial side for the second quarter is also bad. What, specifically, was blamed on Bear Stearns?

 

[PCL_128]

They blamed the Bear Stearns fiasco for basically locking up the credit markets and destroying their credit business completely for the last few weeks of the quarter. Apparently everything was looking on-track until the week that Bear Stearns practically collapsed. After that, they found it incredibly difficult to get any business done.

As for AAI and ARSs, the question isn't really whether they are common, the question is the likelihood of AAI's $30 million cash growth being invested in these types of securities. In the past, AAI has specifically listed ARSs in their 10-K filings, but I don't think there have been any listed in several years. None were listed in 2007. That would tend to indicate that those investments were shifted to other investment vehicles and haven't been revisited in some time.

 

[Andy]

They blamed Bear for locking up the credit markets? That's BS. No wonder their stock was down so much.
if anything, the borderline illegal actions taken by the Fed have significantly eased the credit markets.
It sounds like they had to go mark to market on some of their paper. There's been way too much mark to fantasy going on.

PCL, I don't know how much of AAI's cash/equivalents are in ARSs. If not there, where has AAI been putting their equivalents over the last several years?

 

[PCL_128]

Here you go, Andy. I finally found the relevant information in the Annual Report:

In January 2008, we converted all of our investments in auction rate securities to investments in U.S. Treasury securities.

 

[Andy]

Here you go, Andy. I finally found the relevant information in the Annual Report:

In January 2008, we converted all of our investments in auction rate securities to investments in U.S. Treasury securities.

In one word: BRILLIANT!!!

No sarcasm intended. They dodged a HUGEASS bullet. The credit markets are cratering; the average american has no idea how bad it is.
The only place where I'd feel safe today is in treasuries. The timing on shifting to treasuries was damned near perfect.