Viasat beats the Street on revenue in fourth quarter
Viasat, the leading U.S. provider of internet services in poor coverage areas, reported fourth quarter earnings a few days ago, demonstrating a robust business that’s in a strong position to capitalize on important trends in connectivity. While the report wasn’t exclusively positive – the company saw 13% fewer subscribers a result of delays getting satellite Viasat 2 back in action, for example – the good outweighed the bad by a long shot. Most obviously, perhaps, when the company reported that it had beat analysts’ expectations on revenue growth.
Viasat’s share price spiked when the earnings report hit
SOURCE: Yahoo Finance
For the fourth quarter of 2018, Viasat reported revenues of $439.7 million – a new record, and representative of 6% growth, year on year. The company did equally well over the full year, reporting a new annual revenue record of $1.6 billion. Driving this strong performance was the company’s government systems segment, which delivered “double-digit growth” and set new records for revenue, operating profit and adjusted earning before interest, tax, deductions and amortization (EBITDA).
Other strong points worth mentioning are that the company’s commercial networks segment “returned to revenue growth” and that the company saw new fourth quarter contract awards rise by 5% year on year. That’s a new high for contract awards of $1.7 billion.
The company’s chairman and CEO made the following comment:
“Viasat ended its fiscal year 2018 positioned to drive strong, sustained growth in fiscal year 2019 and beyond. Each business segment executed its mission this year. Government Systems leveraged astute investments in prior years to again deliver record revenue, operating profit and Adjusted EBITDA—up 13%, 42% and 27%, respectively, compared to fiscal year 2017.
Commercial Networks delivered the technology that will drive growth—ramping IFC deliveries to American Airlines and several other new customers; lighting up our state-of-the-art ViaSat-2 ground network; completing critical pre-flight testing milestones for ViaSat-3; and setting the stage to scale rapidly with 29% year-over-year gains in both fourth quarter revenue and new contract awards.
The Satellite Services segment managed through launch and in-service delays for the ViaSat-2 spacecraft by introducing innovative new premium high-speed data plans on ViaSat-1 that lifted ARPU to record levels. We also invested to prepare for growth in residential broadband and IFC services, as well as new vertical and geographic markets. Now all three segments share a common mission in fiscal year 2019—to leverage these strategic positions to deliver solid performance and growth in revenue and Adjusted EBITDA while paving the way for ViaSat-3. We’re looking forward to an exciting year.”
Dominion Investment Manager Christian Cole sees Viasat as a long term, strategic play. He wrote in a note yesterday that the company is in “a strong position to dominate the global provision of high speed internet access in locations where traditional ground-based internet services are unlikely to ever compete, given the economics of providing access to those locations.”