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Iridium (IRDM) Posts Loss in Q4, Revenues Beat Estimates
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Iridium Communications (IRDM - Free Report) reported a loss of 1 cent per share for fourth-quarter 2022 compared with the Zacks Consensus Estimate of breakeven earnings. The company had incurred a loss of 4 cents per share in the prior-year quarter.
Quarterly revenues were $193.8 million, up 24% from the year-ago quarter’s levels. The upside can be attributed to higher demand for equipment and momentum in engineering and support projects. The top line surpassed the Zacks Consensus Estimate by 10.9%.
Total service revenues rose 8% year over year to $136.8 million. The upside can be attributed to strong recurring revenues from a growing subscriber base. Service revenues contributed 71% to total revenues in the fourth quarter.
Iridium Communications Inc Price, Consensus and EPS Surprise
Iridium’s commercial service revenues are expected to benefit from growth in IoT, ongoing activations and solid uptake of the company’s broadband services. Solid performance in commercial broadband, voice and data, and IoT contributed to the segment’s top-line performance.
Subscriber equipment revenues rose 101.5% year over year to $39.3 million due to its higher demand. Engineering and support service revenues rose 84% to $17.8 million from the prior-year quarter’s levels, mainly due to increased activity with the U.S. government.
In response to the results, shares of the company were up 4% in trading on Feb 16 and closed the session at $59.31. In the past year, shares have gained 59% against the Zacks sub-industry’s decline of 21.7%.
Image Source: Zacks Investment Research
Other Details
Total operating expenses were $175.1 million, up 20.6% 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 15% year over year to $107 million. The upside was mainly driven by gains in subscriber equipment, and engineering and support along with growth in commercial service revenues.
Operating income came in at $18.8 million compared with $10.7 million reported in the year-ago quarter.
As of Dec 31, 2022, the company had 1,999,000 billable subscribers, up 16% compared with 1,723,000 at the end of the prior-year quarter. The year-over-year increase was backed by strength in commercial IoT.
As of Dec 31, 2022, the company had $168.8 million in cash and cash equivalents with $1.3 billion of net debt. Capital expenditures were $26.5 million in the quarter under review.
In the fourth quarter of 2022, the company repurchased 0.2 million shares worth $7.7 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 Dec 31, 2022, the company had shares worth $179.6 million under the repurchase program.
2023 Guidance
For 2023, the company expects total service revenue growth between 9% and 11% while OEBITDA is expected to be between $455 million and $465 million.
The Zacks Consensus Estimate for Arista Networks’ 2023 earnings is pegged at $5.23 per share, up 0.8% in the past 60 days. The long-term earnings growth rate is anticipated to be 14.2%.
Arista Networks’ earnings beat the Zacks Consensus Estimate in the last four quarters, the average being 14.2%. Shares of ANET have gained 12.5% in the past year.
The Zacks Consensus Estimate for Jabil’s 2023 earnings is pegged at $8.37 per share, rising 2.3% in the past 60 days. The long-term earnings growth rate is anticipated to be 12%.
Jabil’s earnings beat the Zacks Consensus Estimate in all the last four quarters, the average being 8.8%. Shares of JBL have increased 42.2% in the past year.
The Zacks Consensus Estimate for Bandwidth’s 2023 earnings is pegged at 63 cents per share, up 1 cent in the past 60 days. The long-term earnings growth rate is anticipated to be 25%.
BAND's earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, the average being 301.8%. Shares of the company have declined 48.8% in the past year
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Iridium (IRDM) Posts Loss in Q4, Revenues Beat Estimates
Iridium Communications (IRDM - Free Report) reported a loss of 1 cent per share for fourth-quarter 2022 compared with the Zacks Consensus Estimate of breakeven earnings. The company had incurred a loss of 4 cents per share in the prior-year quarter.
Quarterly revenues were $193.8 million, up 24% from the year-ago quarter’s levels. The upside can be attributed to higher demand for equipment and momentum in engineering and support projects. The top line surpassed the Zacks Consensus Estimate by 10.9%.
Total service revenues rose 8% year over year to $136.8 million. The upside can be attributed to strong recurring revenues from a growing subscriber base. Service revenues contributed 71% to total revenues in the fourth quarter.
Iridium Communications Inc Price, Consensus and EPS Surprise
Iridium Communications Inc price-consensus-eps-surprise-chart | Iridium Communications Inc Quote
Iridium’s commercial service revenues are expected to benefit from growth in IoT, ongoing activations and solid uptake of the company’s broadband services. Solid performance in commercial broadband, voice and data, and IoT contributed to the segment’s top-line performance.
Subscriber equipment revenues rose 101.5% year over year to $39.3 million due to its higher demand. Engineering and support service revenues rose 84% to $17.8 million from the prior-year quarter’s levels, mainly due to increased activity with the U.S. government.
In response to the results, shares of the company were up 4% in trading on Feb 16 and closed the session at $59.31. In the past year, shares have gained 59% against the Zacks sub-industry’s decline of 21.7%.
Image Source: Zacks Investment Research
Other Details
Total operating expenses were $175.1 million, up 20.6% 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 15% year over year to $107 million. The upside was mainly driven by gains in subscriber equipment, and engineering and support along with growth in commercial service revenues.
Operating income came in at $18.8 million compared with $10.7 million reported in the year-ago quarter.
As of Dec 31, 2022, the company had 1,999,000 billable subscribers, up 16% compared with 1,723,000 at the end of the prior-year quarter. The year-over-year increase was backed by strength in commercial IoT.
As of Dec 31, 2022, the company had $168.8 million in cash and cash equivalents with $1.3 billion of net debt. Capital expenditures were $26.5 million in the quarter under review.
In the fourth quarter of 2022, the company repurchased 0.2 million shares worth $7.7 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 Dec 31, 2022, the company had shares worth $179.6 million under the repurchase program.
2023 Guidance
For 2023, the company expects total service revenue growth between 9% and 11% while OEBITDA is expected to be between $455 million and $465 million.
Zacks Rank & Other Stocks to Consider
Iridium currently carries a Zacks Rank #3 (Hold).
Investors interested in the broader technology space may also consider stocks like Arista Networks (ANET - Free Report) , Jabil (JBL - Free Report) and Bandwidth (BAND - Free Report) . Arista sports a Zacks Rank #1 (Strong Buy) while Jabil and Bandwidth 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 Arista Networks’ 2023 earnings is pegged at $5.23 per share, up 0.8% in the past 60 days. The long-term earnings growth rate is anticipated to be 14.2%.
Arista Networks’ earnings beat the Zacks Consensus Estimate in the last four quarters, the average being 14.2%. Shares of ANET have gained 12.5% in the past year.
The Zacks Consensus Estimate for Jabil’s 2023 earnings is pegged at $8.37 per share, rising 2.3% in the past 60 days. The long-term earnings growth rate is anticipated to be 12%.
Jabil’s earnings beat the Zacks Consensus Estimate in all the last four quarters, the average being 8.8%. Shares of JBL have increased 42.2% in the past year.
The Zacks Consensus Estimate for Bandwidth’s 2023 earnings is pegged at 63 cents per share, up 1 cent in the past 60 days. The long-term earnings growth rate is anticipated to be 25%.
BAND's earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, the average being 301.8%. Shares of the company have declined 48.8% in the past year