[08-03-12] MSS operator Iridium<\/b> surprised some analysts with its latest financial results after reporting several consecutive quarters of growth. Iridium\u2019s overall service revenue growth in the second quarter of 2012 was slower than the market expected due to a slight decline in its government business.<\/p>\n
Iridium\u2019s government service revenues dropped 3 percent in the second quarter compared to same period last year, with its core government revenues declining 3.4 percent, according to its latest results issued Aug. 2. The drop-off reflected a 4 percent year-over-year decline in voice revenues despite an 18 percent increase in M2M revenues. The operator\u2019s government voice and data subscriber rates were flat compared to the previous quarters, but Iridium ARPUs dropped 14 percent due to mix and usage patterns. Iridium\u2019s business model has been known to focus on ARPUs as a key metric.
\n Raymond James<\/b> Analyst Chris Quilty said that he expects continued growth in Iridium\u2019s M2M business, but also predicts a likely decline in Iridium\u2019s voice subscribers and ARPUs through the balance of the year until the company lands a new Netted Iridium contract next year.
\n \u201cWhile disappointed with the company\u2019s lower 2012 guidance, we take some comfort from the fact that the weakness appears to be primarily near-term and government related, and does not reflect a material impact to the company\u2019s longer-term growth forecast,\u201d Quilty said in an Aug. 2 research note. \u201cWe remain bullish on the Iridium story and believe any weakness in the stock this morning would represent a buying opportunity.\u201d
\n The second quarter did provide Iridium with some positive news. Iridium\u2019s 7 percent OEBITDA growth was generally in line with analysts\u2019 forecasts. The company also grew its overall revenues 1 percent from the same period in 2011 to $97.3 million. Its service revenues grew 5.1 percent year-over-year, while its equipment revenue grew 9 percent from the same period in 2011.
\n While Iridium\u2019s commercial service revenues grew 8 percent during the quarter, the growth rate was the company\u2019s slowest since becoming a publicly traded entity. The primary reason for the shortfall was declining ARPUs in its voice service. Iridium CEO Matt Desch, however, highlighted that his company was reporting its seventh consecutive quarter of 50 percent or better M2M subscriber growth, adding a company-record 19,000 subs in the quarter.
\n Desch lowered Iridium\u2019s midpoint 2012 EBITDA guidance by 3.5 percent to a range between $205 million and 210 million, due primarily to a slower anticipated service growth rate in both government and commercial sectors. The lower expectation for service revenue growth in 2012 also resulted in Iridium lowering its projected long-term growth rate. Iridium\u2019s management, however, reaffirmed company\u2019s long-term subscriber growth forecast of 20 percent to 25 percent.<\/p>\n","protected":false},"excerpt":{"rendered":"
[08-03-12] MSS operator Iridium surprised some analysts with its latest financial results after reporting several consecutive quarters of growth. Iridium\u2019s overall service revenue growth in the second quarter of 2012 was slower than the market expected due to a slight decline in its government business. Iridium\u2019s government service revenues dropped 3 percent in the […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"inline_featured_image":false,"footnotes":"","_links_to":"","_links_to_target":""},"categories":[2],"tags":[],"class_list":["post-82690","post","type-post","status-publish","format-standard","hentry","category-news"],"acf":[],"_links":{"self":[{"href":"https:\/\/starpath.global\/blog\/wp-json\/wp\/v2\/posts\/82690"}],"collection":[{"href":"https:\/\/starpath.global\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/starpath.global\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/starpath.global\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/starpath.global\/blog\/wp-json\/wp\/v2\/comments?post=82690"}],"version-history":[{"count":0,"href":"https:\/\/starpath.global\/blog\/wp-json\/wp\/v2\/posts\/82690\/revisions"}],"wp:attachment":[{"href":"https:\/\/starpath.global\/blog\/wp-json\/wp\/v2\/media?parent=82690"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/starpath.global\/blog\/wp-json\/wp\/v2\/categories?post=82690"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/starpath.global\/blog\/wp-json\/wp\/v2\/tags?post=82690"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}