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Iridium (IRDM) Q4 Earnings Meet Estimates, Revenues Up Y/Y

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Iridium Communications Inc. IRDM reported a fourth-quarter 2021 loss per share of 4 cents, in line with the Zacks Consensus Estimate and narrower than a loss of 6 cents reported in the prior-year quarter.

Quarterly revenues of $155.9 million, increasing 6.4% from the year-ago quarter’s levels. The upside can be attributed to strength in subscriber equipment sales and higher service revenues. The top line surpassed the consensus mark by 2.3%.

Total service revenues rose 8.5% to $126.7 million from $116.9 million in the year-ago quarter. This was primarily owing to strong revenues from a growing subscriber base. Service revenues contributed 81% to total revenues in the fourth quarter. Solid performance in broadband, commercial voice and data and IoT played a contributing role as well.

Subscriber equipment revenues rose 3% to $19.5 million from $18.9 million in the year-ago quarter due to its higher demand. Engineering and support service revenues declined 10% to $9.7 million from the prior-year quarter’s levels, mainly due to the episodic nature of contract work with the U.S. government.

For 2021, the company reported a loss per share of 7 cents compared with a loss of 42 cents reported in 2020. Revenues came in at $614.5 million, up 5% from the previous year’s levels.

In response to the results, shares of the company are up 2% in the premarket trading on Feb 18.

Iridium Communications Inc Price, Consensus and EPS Surprise

Iridium Communications Inc Price, Consensus and EPS Surprise
Iridium Communications Inc Price, Consensus and EPS Surprise

Iridium Communications Inc price-consensus-eps-surprise-chart | Iridium Communications Inc Quote

Other Details

Total operating expenses were $145.2 million compared with $141.4 million in the prior-year quarter, mainly due to higher cost of subscriber equipment sales and cost of services. Operational EBITDA (OEBITDA) rose 10.2% year over year to $93.4 million. The upside was mainly driven by higher revenues.

Operating income came in at $10.7 million, up 109.3% year over year.

As of Dec 31, 2021, the company registered 1,723,000 billable subscribers compared with 1,476,000 at the end of the previous year. The year-over-year increase was backed by growth in commercial voice and data, IoT data and broadband service customers.

Cash Flow & Liquidity

In 2021, Iridium generated $302.9 million of net cash from operations compared with $249.8 million in the prior year. Capital expenditures were $42.1 million compared with $38.7 million in 2020.

As of Dec 31, the company had $320.9 million in cash and cash equivalents with $1,581.5 million of net long-term secured debt.

In the quarter under review, the company repurchased 976,000 shares worth $38.3 million. As part of the previously-announced $300 million share buyback program, the company repurchased nearly 4.3 million shares worth $163.4 million in 2021. As of Dec 31, 2021, the company has nearly $136.6 million worth of shares remaining under its existing buyback.

2022 Guidance

Iridium expects commercial service revenues to benefit from growth in IoT, ongoing activations and solid uptake of the company’s broadband services.
The company expects service revenues to increase between 5% and 7% in 2022. Iridium now expects full-year 2022 OEBITDA between $400 million and $410 million.

Zacks Rank & Stocks to Consider

Iridium currently has a Zacks Rank #3 (Hold).

Some better-ranked stocks worth considering from the broader technology sector include Broadcom AVGO, Apple AAPL and Cadence Design Systems CDNS. Apple sports a Zacks Rank 1 (Strong Buy) while Broadcom and Cadence carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Broadcom’s fiscal 2022 earnings is pegged at $33.15 per share. The long-term earnings growth rate of the company is pegged at 14.5%.

Broadcom’s earnings beat the Zacks Consensus Estimate in all the preceding four quarters, the average surprise being 1.41%. Shares of Broadcom have increased 21.7% in the past year.

The Zacks Consensus Estimate for Apple’s fiscal 2022 earnings is pegged at $6.15 per share. The long-term earnings growth rate of the company is pegged at 12.5%.

Apple’s earnings beat the Zacks Consensus Estimate in each of the last four quarters, the average surprise being 20.3%. Shares of AAPL have rallied 30.8% in the past year.

The Zacks Consensus Estimate for Cadence 2021 earnings is pegged at $3.25 per share. The long-term earnings growth rate of the company is pegged at 18.2%.

Cadence’s earnings beat the Zacks Consensus Estimate in each of the last four quarters, the average surprise being 11%. Shares of CDNS have declined 1% in the past year.


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