ViaSat Inc.’s VSAT first-quarter fiscal 2016 non-GAAP earnings of 25 cents per share more than doubled from the Zacks Consensus Estimate of 11 cents per share. Also, it rose by about five-fold from the year-ago quarter figure of 5 cents.
This year-over-year improvement was due to higher revenues and adjusted EBIDTA.
Inside the Headlines
Total revenue in the quarter increased 7.8% year over year to $344.4 million, which marginally beat the Zacks Consensus Estimate of $343 million. This was mainly aided by strong service revenues, which accounted for over half of the revenues. Also, rise in demand for residential broadband coupled with enhanced operations in satellite services and bandwidth management aided the growth.
As for the segments, Satellite Services revenues increased 20.7% year over year to $132.4 million, aided by strong consumer residential broadband revenues on the back of increase in subscribers count to 685,000. However, Commercial Networks revenues dropped 27.6% to $66.8 million, on a year-over-year basis. This was owing to slowdown of activity in the large Australian Kaband infrastructure project. On the hand, Government Systems revenues rose 23.6% year over year to $145.2 million, majorly fueled by high government managed Wi-Fi services revenues on the back of the acquisition of NetNearU as well as high sales of tactical data link products.
However, during the quarter, sales backlog dipped 2.2% year over year to $872.5 million, due to certain contract changes and amendments.
Nevertheless, adjusted EBIDTA in the quarter upped 28.9% year over year to $77.5 million. This was owing to ViaSat’s continued efforts to enhance the value of its advanced technologies in consumer, business and government markets.
Notable developments
During the quarter under review, ViaSat announced the acquisition of private firm Engreen, dealing in network virtualization, to strengthen management flexibility for its global satellite-ground system.
Also, the company’s commercial in-flight Wi-Fi services grew to over 380 aircraft in service by the end of the first quarter, from 135 in the comparable period.
Liquidity
ViaSat exited the first quarter fiscal 2016 with cash and cash equivalents of $42.5 million, compared with $52.3 million as on Apr 3, 2015.
To Conclude
Going forward, ViaSat expects growth in its fixed and mobile broadband businesses to escalate further aided by high consumer demand for Exede broadband services as well as rising demand from enterprise and mobile users worldwide for mobile broadband solutions.
ViaSat currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the same industry includes Ericsson ERIC, InterDigital, Inc. IDCC and Motorola Solutions, Inc. MSI. All stocks sport a Zacks Rank #2 (Buy).
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