Viasat (VSAT) Q4 Loss Narrower Than Estimates, Revenues Beat

Viasat, Inc. VSAT reported better-than-expected results in the fourth quarter of fiscal 2018.

Net Loss

On a GAAP basis, net loss in the reported quarter totaled $19.9 million or a loss of 34 cents per share against net income of $6.7 million or 11 cents in the year-ago quarter, primarily because of higher operating expenses.

For fiscal 2018, the company reported a net loss of $67.3 million or loss of $1.15 per share against a net income of $23.8 million or 45 cents a year ago.

In the fourth quarter, non-GAAP net loss was $3.1 million or a loss of 5 cents per share versus net income of $18.5 million or 32 cents in the year-earlier quarter. Adjusted loss was narrower than the Zacks Consensus Estimate of a loss of 19 cents.

Revenues

Quarterly total revenues increased 5.6% year over year to $439.7 million, primarily driven by strong performance by the Commercial Networks and Government Systems segments. The top line surpassed the Zacks Consensus Estimate of $424 million.

In fiscal 2018, revenues increased 2.3% year over year to $1,594.6 million.

Segmental Performance

Revenues at Satellite Services decreased 9.9% year over year to $145 million. The segment’s operating loss was $21.1 million against a profit of $32.8 million in the year-ago quarter. Adjusted EBITDA was $30.1 million, down 59.9% year over year. This was due to the completion of payments under the SS/L settlement agreement in the prior fiscal coupled with costs associated with the preparation and launch of the ViaSat-2 satellite service in the fourth quarter and upcoming IFC service ramp anticipated in fiscal 2019.

Commercial Networks revenues were up 28.9% year over year to $76.2 million, primarily driven by ramping up of in-flight terminal deliveries. Operating loss was $50.1 million compared with a loss of $52.5 million in the year-ago quarter owing to rapid scaling in-flight connectivity installations. Adjusted EBITDA was a negative $32.9 million compared with a negative $36.5 million a year ago, reflecting R&D investments in the company's ultra-high capacity ViaSat-3 class satellite constellation.

Government Systems revenues increased 11.2% year over year to $218.6 million, driven by the company's market-leading next-generation small form factor tactical data link products including the world's first handheld Link 16 radio.

Operating profit was $40.6 million, up 58.9% year over year, primarily driven by record shipment levels of Viasat's Non-Developmental Item datalink products. Adjusted EBITDA was $58.4 million, up 29.9% year over year.

Liquidity

As of Mar 31, 2018, Viasat had $71.4 million of cash and cash equivalents compared with $130.1 million a year ago. The company’s long-term debt was $287.5 million compared with $273.1 million as of Mar 31, 2017.

ViaSat-2 commercial service was launched in the fourth quarter of fiscal 2018, which helped Viasat become the first satellite Internet service provider globally to offer plans with download speeds of up to 100 Mbps.

Zacks Rank & Other Stocks to Consider

Viasat currently carries a Zacks Rank #3 (Hold). A few better-ranked stocks in the broader industry are Motorola Solutions, Inc. MSI, BlackBerry Limited BB and Ubiquiti Networks, Inc. UBNT. While Motorola and BlackBerry sport a Zacks Rank #1 (Strong Buy), Ubiquiti carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Motorola has an expected long-term earnings growth rate of 8%. It beat earnings estimates in each of the trailing four quarters, the average being 12.1%.

BlackBerry has an expected long-term earnings growth rate of 18.6%. It has beaten earnings estimates twice in the trailing four quarters, the average being a positive 500%.

Ubiquiti has an expected long-term earnings growth rate of 18.6%. It surpassed earnings estimates thrice in the trailing four quarters, the average being a positive 8.9%.

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