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Iridium (IRDM) Incurs Loss in Q3, Misses Revenue Estimates
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Iridium Communications (IRDM - Free Report) reported a loss of 1 cent per share for third-quarter 2023 against the Zacks Consensus Estimate of earnings of 3 cents. The company reported earnings of 2 cents in the prior-year quarter.
Management noted that this net loss was mainly due to costs incurred in connection with refinancing of a credit facility, which extended the maturity to September 2030 and reduced the interest rate.
Quarterly revenues were $197.6 million, up 7% from the year-ago levels. The upside can be attributed to momentum in commercial business lines and strength in the Engineering and Support segment’s sales. However, the top line missed the Zacks Consensus Estimate by 1.1%.
Total Service revenues rose 9% year over year to $152 million. Strong recurring revenues from a growing subscriber base resulted in the upside. Service revenues contributed 77% to total revenues in the third quarter. Our estimate for the metric was $150.9 million.
Iridium Communications Inc Price, Consensus and EPS Surprise
Solid performance in commercial broadband, voice and data, and IoT contributed to the segment’s top-line performance.
Subscriber Equipment revenues fell 27% year over year to $20.4 million. Engineering and Support Service revenues rose 47% to $25.2 million from the prior-year levels, mainly due to increased government activity.
Iridium also provided updated guidance for 2023. Management now expects total Service revenue growth to be 10% (earlier expectation was 9-11% rise) for 2023. Operational EBITDA (OEBITDA) is projected in the range of $460-$465 million compared with the earlier prediction of $455-$465 million.
In response to the results, shares of IRDM were down 9.1% in trading on Oct 19 and closed the session at $39.78. In the past year, shares have gained 16.3% against the Zacks sub-industry’s decline of 10%.
Image Source: Zacks Investment Research
Other Details
Total operating expenses were $169.5 million, up 2% from the prior-year quarter, primarily due to higher costs of services, selling, general and administrative expenses, and research and development costs.
OEBITDA improved 12% year over year to $121.3 million.
Operating income reached $28.2 million compared with $17.9 million in the year-ago quarter.
As of Sep 30, the company had 2,236,000 billable subscribers, up 13% compared with 1,973,000 at the prior-year quarter end. The year-over-year gain was backed by strength in commercial IoT.
As of Sep 30, total cash and cash equivalents were $67.9 million, with $1.4 billion of net debt. Capital expenditures were $12 million in the quarter under review.
In the third quarter of 2023, IRDM repurchased 1.4 million shares worth $73.8 million. On Jul 28, 2023, it announced that its board of directors have authorized to repurchase an additional $400 million of the company’s shares through Dec 31, 2025. As of Sep 30, 2023, it had shares worth $385.7 million under the repurchase program.
The Zacks Consensus Estimate for Asure Software’s 2023 earnings per share (EPS) has increased 5.9% in the past 60 days to 54 cents.
Asure Software’s earnings beat the Zacks Consensus Estimate in each of the last four quarters, the average surprise being 676.4%. Shares of ASUR have surged 55.9% in the past year.
The Zacks Consensus Estimate for Synopsys’ fiscal 2023 EPS has gained 0.4% in the past 60 days to $11.09. SNPS’ long-term earnings growth rate is 16.4%. Shares of SNPS have climbed 62.7% in the past year.
The Zacks Consensus Estimate for VMware’s fiscal 2024 EPS has improved 5.9% in the past 60 days to $7.23.
VMware’s earnings outpaced the Zacks Consensus Estimate in two of the last four quarters while missing twice. The average earnings surprise is 1.2%. Shares of VMW have jumped 37.1% in the past year.
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Iridium (IRDM) Incurs Loss in Q3, Misses Revenue Estimates
Iridium Communications (IRDM - Free Report) reported a loss of 1 cent per share for third-quarter 2023 against the Zacks Consensus Estimate of earnings of 3 cents. The company reported earnings of 2 cents in the prior-year quarter.
Management noted that this net loss was mainly due to costs incurred in connection with refinancing of a credit facility, which extended the maturity to September 2030 and reduced the interest rate.
Quarterly revenues were $197.6 million, up 7% from the year-ago levels. The upside can be attributed to momentum in commercial business lines and strength in the Engineering and Support segment’s sales. However, the top line missed the Zacks Consensus Estimate by 1.1%.
Total Service revenues rose 9% year over year to $152 million. Strong recurring revenues from a growing subscriber base resulted in the upside. Service revenues contributed 77% to total revenues in the third quarter. Our estimate for the metric was $150.9 million.
Iridium Communications Inc Price, Consensus and EPS Surprise
Iridium Communications Inc price-consensus-eps-surprise-chart | Iridium Communications Inc Quote
Solid performance in commercial broadband, voice and data, and IoT contributed to the segment’s top-line performance.
Subscriber Equipment revenues fell 27% year over year to $20.4 million. Engineering and Support Service revenues rose 47% to $25.2 million from the prior-year levels, mainly due to increased government activity.
Iridium also provided updated guidance for 2023. Management now expects total Service revenue growth to be 10% (earlier expectation was 9-11% rise) for 2023. Operational EBITDA (OEBITDA) is projected in the range of $460-$465 million compared with the earlier prediction of $455-$465 million.
In response to the results, shares of IRDM were down 9.1% in trading on Oct 19 and closed the session at $39.78. In the past year, shares have gained 16.3% against the Zacks sub-industry’s decline of 10%.
Image Source: Zacks Investment Research
Other Details
Total operating expenses were $169.5 million, up 2% from the prior-year quarter, primarily due to higher costs of services, selling, general and administrative expenses, and research and development costs.
OEBITDA improved 12% year over year to $121.3 million.
Operating income reached $28.2 million compared with $17.9 million in the year-ago quarter.
As of Sep 30, the company had 2,236,000 billable subscribers, up 13% compared with 1,973,000 at the prior-year quarter end. The year-over-year gain was backed by strength in commercial IoT.
As of Sep 30, total cash and cash equivalents were $67.9 million, with $1.4 billion of net debt. Capital expenditures were $12 million in the quarter under review.
In the third quarter of 2023, IRDM repurchased 1.4 million shares worth $73.8 million. On Jul 28, 2023, it announced that its board of directors have authorized to repurchase an additional $400 million of the company’s shares through Dec 31, 2025. As of Sep 30, 2023, it had shares worth $385.7 million under the repurchase program.
Iridium currently carries a Zacks Rank #4 (Sell).
Stocks to Consider
Some better-ranked stocks in the broader technology space are Asure Software (ASUR - Free Report) , Synopsys (SNPS - Free Report) and VMware . While Asure Software and VMware sport a Zacks Rank #1 (Strong Buy) each, Synopsys carries a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Asure Software’s 2023 earnings per share (EPS) has increased 5.9% in the past 60 days to 54 cents.
Asure Software’s earnings beat the Zacks Consensus Estimate in each of the last four quarters, the average surprise being 676.4%. Shares of ASUR have surged 55.9% in the past year.
The Zacks Consensus Estimate for Synopsys’ fiscal 2023 EPS has gained 0.4% in the past 60 days to $11.09. SNPS’ long-term earnings growth rate is 16.4%. Shares of SNPS have climbed 62.7% in the past year.
The Zacks Consensus Estimate for VMware’s fiscal 2024 EPS has improved 5.9% in the past 60 days to $7.23.
VMware’s earnings outpaced the Zacks Consensus Estimate in two of the last four quarters while missing twice. The average earnings surprise is 1.2%. Shares of VMW have jumped 37.1% in the past year.