When Intelsat SA.’s (NYSE:I) announced its latest earnings (31 December 2017), I wanted to understand how these figures stacked up against its past performance. The two benchmarks I used were Intelsat’s average earnings over the past couple of years, and its industry performance. These are useful yardsticks to help me gauge whether or not I actually performed well. Below is a quick commentary on how I see I has performed. See our latest analysis for Intelsat
How Well Did I Perform?
I prefer to use data from the most recent 12 months, which annualizes the most recent half-year data, or in some cases, the latest annual report is already the most recent financial year data. This technique allows me to assess many different companies in a uniform manner using new information. For Intelsat, its latest trailing-twelve-month earnings is -US$178.73M, which, in comparison to the previous year’s figure, has turned from positive to negative. Since these values may be fairly myopic, I’ve calculated an annualized five-year figure for Intelsat’s net income, which stands at -US$542.86M. This shows that, while net income is negative, it has become less negative over the years.
We can further evaluate Intelsat’s loss by looking at what the industry has been experiencing over the past few years. Each year, for the past five years Intelsat has seen an annual decline in revenue of -3.81%, on average. This adverse movement is a driver of the company’s inability to reach breakeven. Has the entire industry experienced this headwind? Eyeballing growth from a sector-level, the US telecom industry has been growing, albeit, at a subdued single-digit rate of 5.97% in the past twelve months, and 3.56% over the past half a decade. This shows that any tailwind the industry is deriving benefit from, Intelsat has not been able to gain as much as its average peer.
What does this mean?
Though Intelsat’s past data is helpful, it is only one aspect of my investment thesis. With companies that are currently loss-making, it is always hard to forecast what will occur going forward, and when. The most valuable step is to assess company-specific issues Intelsat may be facing and whether management guidance has consistently been met in the past. You should continue to research Intelsat to get a better picture of the stock by looking at:
- Future Outlook: What are well-informed industry analysts predicting for I’s future growth? Take a look at our free research report of analyst consensus for I’s outlook.
- Financial Health: Is I’s operations financially sustainable? Balance sheets can be hard to analyze, which is why we’ve done it for you. Check out our financial health checks here.
- Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.
NB: Figures in this article are calculated using data from the trailing twelve months from 31 December 2017. This may not be consistent with full year annual report figures.
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned.