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Iridium (IRDM) Q2 Earnings & Revenues Top Estimates, Up Y/Y

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Iridium Communications Inc (IRDM - Free Report) reported earnings of 4 cents per share in second-quarter 2022, ahead of the Zacks Consensus Estimate of breakeven earnings. The company delivered 3 cents in the prior-year quarter.

Quarterly revenues of $174.9 million, increasing 17% from the year-ago quarter’s levels. The upside can be attributed to higher demand for equipment and new subscriber activations. The top line surpassed the consensus mark by 6.6%.

Total service revenues rose 10% year over year to $132.9 million. The upside can be attributed to strong revenues from a growing subscriber base. Service revenues contributed 76% to total revenues in the second quarter. Solid performance in commercial broadband, voice and data and IoT contributed to the segment’s top-line performance.

Subscriber equipment revenues rose 55% year over year to $33.8 million due to its higher demand. Engineering and support service revenues, up 21.2% to $8.3 million from the prior-year quarter’s levels, mainly due to increased commercial activity and the episodic nature of contract work with the U.S. government.

Driven by the strong quarterly results, the company raised its outlook for 2022. The company expects service revenues to increase between 7% and 9% in 2022 against the earlier guidance of 5-7% growth in 2022. Iridium now expects full-year 2022 OEBITDA between $410 million and $420 million compared with the earlier guidance of $400-$410 million.

Iridium Communications Inc Price, Consensus and EPS Surprise

 

Iridium Communications Inc Price, Consensus and EPS Surprise

Iridium Communications Inc price-consensus-eps-surprise-chart | Iridium Communications Inc Quote

 

Iridium commercial service revenues are expected to benefit from growth in IoT, ongoing activations and solid uptake of the company’s broadband services.

In response to the results, shares of the company were up 6.2% in trading on Jul 26 and closed the session at $42.28. In the past year, shares have gained 3.3% compared with the industry’s decline of 21.2%.

Zacks Investment Research
Image Source: Zacks Investment Research

Other Details

Total operating expenses were $154.1 million, up 11.4% from the prior-year quarter, mainly due to higher cost of subscriber equipment sales, selling, general and administrative and cost of services. Operational EBITDA (OEBITDA) rose 12% year over year to $105.9 million. The upside was mainly driven by higher revenues.

Operating income came in at $20.8 million compared with $11.6 million reported in the year-ago quarter.

As of Jun 30, 2022, the company had 1,875,000 billable subscribers, up 16% compared with 1,616,000 at the end of the prior-year quarter. The year-over-year increase was backed by commercial voice and data, IoT data and broadband service customers growth.

As of Jun 30, the company had $227.2 million in cash and cash equivalents with $1.4 billion of net debt. Capital expenditures were $17.5 million in the quarter under review.

In the quarter under review, the company repurchased 1 million shares worth $35 million. On Mar 7, 2022, Iridium’s board of directors approved a new share repurchase authorization of an additional $300 million through Dec 31, 2023. As of Jun 30, 2022, the company had $267.5 million under its repurchase authorization.

Zacks Rank & Other Stocks to Consider

Iridium currently has a Zacks Rank #2 (Buy).

Some other top-ranked stocks from the broader technology sector worth consideration are Synopsys (SNPS - Free Report) , Aspen Technology (AZPN - Free Report) and Badger Meter (BMI - Free Report) . BMI sports a Zacks Rank #1 (Strong Buy) while Synopsys and Aspen carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for BMI’s 2022 earnings is pegged at $2.30 per share, up 7% in the past 60 days. Badger Meter’s earnings beat the Zacks Consensus Estimate in all the preceding four quarters, with the average being 12.6%. Shares of BMI have lost 8.7% of their value in the past year.

The Zacks Consensus Estimate for Synopsys 2022 earnings is pegged at $8.67 per share, unchanged in the past 60 days. The long-term earnings growth rate is anticipated to be 19.6%.

Synopsys earnings beat the Zacks Consensus Estimate in the last four quarters, the average being 2.7%. Shares of SNPS have increased 19.6% in the past year.

The Zacks Consensus Estimate for Aspen’s fiscal 2022 earnings is pegged at $5.49 per share, rising 0.4% in the past 60 days. The long-term earnings growth rate is anticipated to be 16.3%.

Aspen’s earnings beat the Zacks Consensus Estimate in three of the last four quarters, the average being 4%. Shares of AZPN have grown 24.5% in the past year.