Skywest Inc quarterly earnings call

[blesko]

You idiots, stock repurchase is a no-net-gain transaction. They're trading shares for cash (sorry, I mean CA$H-MONEY) and it doesn't get reported as operating income or loss. In addition, stock repurchase increases the value of the outstanding shares.

Yeah that's only partly true. A=L+OE. Where assets are in cash and OE is in stock. They are on two sides of the balance sheet where one can report a "loss" but the other side of the sheet reveals a different story.

 

[fastback]

Yeah that's only partly true. A=L+OE. Where assets are in cash and OE is in stock. They are on two sides of the balance sheet where one can report a "loss" but the other side of the sheet reveals a different story.

I thought it was ALORE: Assets = Liabilities + Owner's equity + [Revenue - Expenses].

The [Revenue - Expenses] part is the profit or loss. So a stock buyback from cash should have no impact on top or bottom line numbers.

 

[777forever]

Yeah that's only partly true. A=L+OE. Where assets are in cash and OE is in stock. They are on two sides of the balance sheet where one can report a "loss" but the other side of the sheet reveals a different story.

Incorrect

All I could hear out of the call was cost reductions coming on the ASA side. A caller asked about specifics, but BR didn't feel comfortable elaborating.

Just to clarify the caller asked about what specific amount in cost reduction were they looking for, not how they are going to do it. BR was hesitant to say a specific amount but did go into a little detail about how the significant reduction in ASA's average stage length (450mi avg reduced to 400mi) has negatively impacted its cost structure due to higher cycles on aircraft and increased maintenance.

 

[NotTooBad]

Incorrect



Just to clarify the caller asked about what specific amount in cost reduction were they looking for, not how they are going to do it. BR was hesitant to say a specific amount but did go into a little detail about how the significant reduction in ASA's average stage length (450mi avg reduced to 400mi) has negatively impacted its cost structure due to higher cycles on aircraft and increased maintenance.

I believe that number was 300mi

 

[777forever]

I believe that number was 300mi

Correct. Stupid smartphone and me not proofreading

 

[homerjdispatch]

Correct. Stupid smartphone and me not proofreading

Yeah.. because the smart phone changes a 400 to 300... Smartphones arent stupid, people are...

 

[blesko]

Incorrect



Uh, brush up on the accounting chief........ they used cash (an asset) to repurchase stock (owners equity), resulting a net cash loss as its tied up in OE.

 

[nerjdriver]

BINGO!



Jerry spends @$20 million or so on a completely arbitrary stock buyback, and yet we "lost" money. The bad part is that our union and pilots will all be fooled by this B.S., and we will choke down a pay cut.

This is the best money Jerry ever spent! (You may notice that the stock price hasn't really dropped, all the real institutional investors know exactly what is going on-Jerry is just browbeating some dumbass pilots again.)

XJT guys won't buy it ever again. Seems ASA has a few kool-aid drinkers willing to sell their first born for the survival of the mighty ASA. This is all smoke and mirrors, bs, games or whatever you want to call it. At the end of the day I want my contract and then some, pre-concessionary wages and then some, until then.....I vote NO.

 

[blesko]

I thought it was ALORE: Assets = Liabilities + Owner's equity + [Revenue - Expenses].

The [Revenue - Expenses] part is the profit or loss. So a stock buyback from cash should have no impact on top or bottom line numbers.

Revenue-Expenses= Profit. Generically, this is in cash, which is then considered an asset. It is not always an asset, unless the profit is positive.

 

[crj567]

Incorrect



Uh, brush up on the accounting chief........ they used cash (an asset) to repurchase stock (owners equity), resulting a net cash loss as its tied up in OE.

Thank you for handling that dumbass (and the dumbass before him....) I just don't have the patience.

 

[Jon Rivoli]

Incorrect



Uh, brush up on the accounting chief........ they used cash (an asset) to repurchase stock (owners equity), resulting a net cash loss as its tied up in OE.

Actually, it is you that needs to brush up on your accounting. You are confusing the balance sheet with the income statement.

A stock repurchase is a balance sheet transaction, a loss occurs on an income statement.

The balance sheet is the accumulated assets and liabilities; what is owned and who owns it. A stock repurchase is simply a transfer of some of the ownership from stockholder to retained equity for a sum of zero. The cash balance goes down, retained earnings goes up. It has the same effect as paying down debt, a reduction in future expenses, either interest in the case of debt or dividends in the case of stock.

An operating loss means that for a given reporting period expenses exceeded revenue. That loss is then made up by transferring asserts from the balance sheet; the cash balance goes down by the amount of the loss. When a profit is made it is transferred to the balance sheet and the cash balance goes up.

Your welcome.

 

[777forever]

Yeah that's only partly true. A=L+OE. Where assets are in cash and OE is in stock. They are on two sides of the balance sheet where one can report a "loss" but the other side of the sheet reveals a different story.

Dude, you're wrong. The stock buyback will affect earnings per share. It has absolutely no effect on profit/loss. Believe me I'm 110% sure on this

Thank you for handling that dumbass (and the dumbass before him....) I just don't have the patience.

CRJ567, You are a complete and utter moron. Did you even pass college? If you did you sure didn't take a finance course. On here acting like you know what yore talking about. You have a significant shortage of intelligence.

If you think Skywest would have reported a profit if they hadn't repurchased company stock please go get some tutoring on basic accounting and finance! That's as bad a saying pull the nose up to recover from a stall!

 

[777forever]

For the financially inclined, google is your friend, but Imma help ya out alittle. Enjoy!

http://www.investopedia.com/articles/02/041702.asp

 

[FORESTGUMP]

Careful you guys. This is starting to get away from "aviation".....mom will get mad.... ;-)

 

[CaribPilot]

You guys really need to get a handle on this quoting thing...this is getting a bit confusing.

 

[COOPERVANE]

You guys really need to get a handle on this quoting thing...this is getting a bit confusing.

I agree. Totally out of hand.

 

[homerjdispatch]

I agree. Totally out of hand.

Oh, i see what you did there.. I like it.

 

[COOPERVANE]

http://www.youtube.com/watch?v=abWi8RiR7FU

 

[paid4training]

The repurchased stock becomes treasury stock and is shown as a seperate entry on the balance sheet... And it is on the bottom section in the owners equitity section of the balance sheet. On income statement it is on the expense section as purchased oc treasury stock but year end shows up on balance sheet....

I'm pretty sure that is what my wife with CPA with a masters degree just told me....