10 Stocks With Explosive Earnings Growth: No. 10 ViaSat (VSAT)

June 29, 2009 5:42 PM EDT

In the current difficult macroeconomic environment it is hard to find companies that are earning a meaningful profit, let alone growing earnings. But these 10 stocks have been rewarding investors with explosive earnings growth and stock performance to boot. You can track the entire series here.

Number 10: ViaSat Inc. (Nasdaq: VSAT)

ViaSat produces innovative satellite and other digital communication products that enable fast, secure, and efficient communications to any location.

The company operates in three segments — government systems, commercial networks and satellite services. The government systems business is focused on network-centric government communications, where we develop and produce systems and specialized equipment for government customers for tactical data links, unmanned aerial vehicles (UAV), secure networking, signal processing and generation, and satellite communications applications. The commercial networks segment develops and produces communication systems and products for consumer, enterprise and mobile (aviation, maritime and ground mobile) broadband customers. The satellite services segment provides managed network satellite services to enterprise and mobile broadband customers.

Earnings Growth:
Since the fiscal year ended April 1, 2005 ViaSat has doubled its net income from $19.3 million to $38.3 million. In that time, diluted EPS has nearly doubled from $0.68 to $1.20, or on average about 15% per year. 2009 was another record year for ViaSat, and on a non-GAAP basis the company grew EPS from $1.36 to $1.57, year-over-year. The company benefited from a lower tax rate in 2009.

Earnings Prospects:
ViaSat is looking to continue its earnings growth with an objective of 10% EPS growth for fiscal year 2010 supported by record backlog and unusually robust new proposal activity. Fiscal year 2009 orders exceeded revenues by about 16%, increasing backlog by about $100 million. In addition, the company's important ViaSat-1 satellite launch is on schedule for 2011 and the company's been able to reduce the budget by about 10%.

ViaSat's Government Business continues to lead the company's financial performance. Based on the reprioritization outlined by Defense Secretary Gates, ViaSat appears in a favorable position. The emphasis on special operations and innovative procurement appears to benefit the company. The company said the recent surge in proposal activity gives them confidence in the breadth of their opportunities.

Stock Performance:
Shares of VSAT are up 7.3% YTD versus a 2.6% rise in the S&P 500. Over the last year, shares of VSAT are up 27% versus a 27% drop in the S&P 500. Over the last 5-years, shares of VSAT are up 8%, versus an 18% drop in the S&P 500.

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