Factors to Note Ahead of Iridium's (IRDM) Q3 Earnings Release
Iridium Communications IRDM is slated to release third-quarter 2023 results on Oct 19, before market open.
The Zacks Consensus Estimate for earnings per share (EPS) is pegged at 3 cents, unchanged in the past 30 days. In the year-ago quarter, the company reported EPS of 2 cents. The consensus estimate for revenues is pegged at $199.8 million, suggesting year-over-year growth of 8.6%.
In the last reported quarter, Iridium incurred a loss of 24 cents per share. The Zacks Consensus Estimate was pegged at 3 cents. It reported earnings of 4 cents in the prior-year quarter.
Management noted that the net loss was mainly due to write-off of its remaining ground spare satellite. This happened after the earlier launch of five of its six ground spare satellites in May. IRDM recorded depreciation expense of $37.5 million in the second quarter pertaining to write-off of the spare satellite.
Iridium Communications Inc Price and EPS Surprise
Iridium Communications Inc price-eps-surprise | Iridium Communications Inc Quote
Factors at Play
Iridium’s third-quarter performance is likely to have gained from momentum in the Engineering and Support Service segment. This segment is anticipated to have gained from increased commercial and government activities. Our estimate for segmental revenues is pegged at $20.1 million, implying a jump of 17.7% from a year ago.
IRDM’s recurring service revenue base, driven by robust subscriber growth and mobile penetration, lends it a competitive edge and is expected to have driven its third-quarter performance. Continued momentum in the uptake of Push-to-Talk and Iridium GO! services bode well.
As of Jun 30, the company had 2,140,000 billable subscribers, up 14% compared with 1,875,000 at the end of the prior-year quarter. The year-over-year increase was backed by strength in commercial IoT.
Our estimate for quarterly revenues from Services (which accounts for a significant chunk of total revenues) is pegged at $150.9 million, indicating a rise of 8.6% from the year-ago levels.
The company’s commercial service revenues are likely to have been aided by growth in the Internet of Things (IoT), ongoing activations and solid uptake of its broadband services. We estimate commercial service revenues to be $124.4 million, suggesting a 10.6% climb year over year.
Increasing sales of hardware is supporting IRDM’s commercial business lines, which, in turn, is likely to have cushioned the Subscriber Equipment segment’s performance. Our estimate for quarterly revenues from the Subscriber Equipment segment is pegged at $28.6 million, indicating a 2.2% gain year over year.
However, global macroeconomic weakness and inflation are likely to have acted as headwinds for Iridium’s third-quarter revenues. Rising costs related to research & development, stock-based compensation and new employee hires are concerning.
What Our Model Says
Our proven model does not conclusively predict an earnings beat for Iridium this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. However, this is not the case here.
Earnings ESP: Iridium has an Earnings ESP of +108.69%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Iridium currently carries a Zacks Rank #5 (Strong Sell).
Stocks to Consider
Here are some stocks you may consider as our model shows that these have the right combination of elements to beat on earnings this season.
Badger Meter BMI has an Earnings ESP of +4.14% and currently carries a Zacks Rank #2. BMI is scheduled to report quarterly earnings on Oct 19. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for BMI’s to-be-reported quarter’s earnings and revenues is pegged at 76 cents per share and $172.9 million, respectively. Shares of BMI have gained 41.7% in the past year.
Elevance Health, Inc ELV has an Earnings ESP of +0.09% and presently carries a Zacks Rank #3. ELV is slated to release quarterly numbers on Oct 18.
The Zacks Consensus Estimate for ELV’s to-be-reported quarter’s earnings and revenues is pegged at $8.45 per share and $42.53 billion, respectively. Shares of ELV have lost 3.3% of their value in the past year.
Lam Research Corporation LRCX has an Earnings ESP of +0.03% and a Zacks Rank #2. LRCX is set to report quarterly figures on Oct 18.
The Zacks Consensus Estimate for LRCX’s to-be-reported quarter’s earnings and revenues is pegged at $6.07 per share and $3.41 billion, respectively. Shares of LRCX have surged 102.8% in the past year.
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Iridium Communications Inc (IRDM) : Free Stock Analysis Report
Elevance Health, Inc. (ELV) : Free Stock Analysis Report
