Iridium Communications (IRDM) Tops Q3 EPS by 2c; Updates FY16, Longer-Range Outlooks

October 27, 2016 8:34 AM EDT
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Iridium Communications (NASDAQ: IRDM) reported Q3 EPS of $0.26, $0.02 better than the analyst estimate of $0.24. Revenue for the quarter came in at $112.8 million versus the consensus estimate of $111.21 million.

2016 Outlook

The Company updated its full-year 2016 outlook for total service revenue growth and OEBITDA. The Company now expects:

  • Total service revenue growth between 5% and 6% for the full-year 2016.
  • Full-year 2016 OEBITDA between $250 million and $255 million. OEBITDA for 2015 was $234.0 million.
2016 Outlook (July 2016)2016 Outlook(October 2016)
Total Service Revenue Growth4% to 6%5% to 6%
Operational EBITDA (OEBITDA)$245 million to $255 million $250 million to $255 million

Long-Range Outlook

Given the expected completion of Iridium NEXT during 2018, the Company now expects that 2019 will be the first full year of operation of its next generation of satellites. To reflect this change in schedule, the Company is introducing financial guidance for 2019. The Company updated its long-range outlook for timing of total service revenue, OEBITDA margin and net leverage. Iridium now expects:

  • Total service revenue between $440 million and $465 million for the full-year 2019.
  • OEBITDA margin of approximately 60% in 2019.
  • Negligible cash taxes from 2016 to approximately 2020.
  • Peak net leverage of 6.0x to 6.5x OEBITDA in 2017.
  • Net leverage below 4x OEBITDA in 2019.
Long-Range Outlook(July 2016)Long-Range Outlook(October 2016)
Total Service Revenue$420 million to $465 million for the full-year 2018$440 million to $465 million for the full-year 2019
Operational EBITDA (OEBITDA) Margin Approximately 60% in 2018Approximately 60% in 2019
Cash TaxesNegligible cash taxes from 2016 to approximately 2020Affirmed
Peak Net Leverage6.0x - 6.5x OEBITDA in 2017Affirmed
Net LeverageApproximately 4x OEBITDA in 2018Below 4x OEBITDA in 2019

For earnings history and earnings-related data on Iridium Communications (IRDM) click here.



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