Iridium (IRDM) Q4 Earnings & Revenues Beat Estimates, Up Y/Y
Iridium Communications IRDM reported earnings per share (EPS) of 30 cents for fourth-quarter 2023, which beat the Zacks Consensus Estimate of earnings of 3 cents. The company reported a loss of 1 cent in the prior-year quarter.
Management noted that earnings benefited due to an increase in tax benefits and continued growth in total commercial services. Additionally, the company's expected satellite useful lifetimes have changed, which has resulted in a year-over-year decrease in depreciation expense.
Quarterly revenues were $194.7 million, up 0.5% from the year-ago levels. The upside can be attributed to momentum in commercial business lines and strength in the Engineering and Support segment’s sales. Also, the top line surpassed the Zacks Consensus Estimate by 0.8%.
Iridium Communications Inc Price, Consensus and EPS Surprise
Iridium Communications Inc price-consensus-eps-surprise-chart | Iridium Communications Inc Quote
Total Service revenues rose 8% year over year to $148 million. Strong recurring revenues from a growing subscriber base resulted in the upside. Service revenues contributed 76% to total revenues in the fourth quarter. Our estimate for the metric was $151.9 million.
Solid performance in commercial broadband, voice and data, and IoT contributed to the segment’s top-line performance.
Subscriber Equipment revenues fell 60% year over year to $15.6 million. Engineering and Support Service revenues rose 74% to $31.1 million from the prior-year levels, mainly due to increased government activity.
Other Details
Total operating expenses were $148.4 million, down 15.2% from the prior-year quarter, primarily due to lower selling, general and administrative expenses, and depreciation and amortization costs.
Operational EBITDA (OEBITDA) improved 7% year over year to $114.1 million.
Operating income reached $46.3 million compared with $18.7 million in the year-ago quarter.
As of Dec 31, 2023, the company had 2,279,000 billable subscribers, up 14% compared with 1,999,000 at December 2022-end. The year-over-year gain was backed by strength in commercial IoT.
As of Dec 31, 2023, total cash and cash equivalents were $71.8 million, with $1.4 billion of net debt. Capital expenditures were $16.2 million in the quarter under review.
In the fourth quarter of 2023, IRDM repurchased 1.3 million shares worth $51.6 million. On Jul 28, 2023, it announced that its board of directors was authorized to repurchase an additional $400 million of the company’s shares through Dec 31, 2025. As of Dec 31, 2023, it had shares worth $334 million under the repurchase program.
Guidance
Iridium also provided updated guidance for 2024. Management expects total Service revenue growth between 4% and 6% for 2024. OEBITDA is projected to be in the range of $460-$470 million.
Zacks Rank and Stocks to Consider
Iridium currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks worth considering in the broader technology space are Itron ITRI, Woodward WWD and Watts Water Technologies WTS. Itron sports a Zacks Rank #1 (Strong Buy), while Watts Water Technologies and Woodward 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 Itron’s 2023 EPS has remained unchanged in the past 60 days to $2.88. ITRI’s long-term earnings growth rate is 23%.
Itron’s earnings surpassed the Zacks Consensus Estimate in each of the last four quarters, the average surprise being 289.3%. Shares of ITRI have gained 26% in the past year.
The Zacks Consensus Estimate for Woodward’s fiscal 2024 EPS has inched up 5.7% in the past 60 days to $5.20. WWD’s long-term earnings growth rate is 15.5%.
Woodward’s earnings beat the Zacks Consensus in each of the last four quarters, the average surprise being 27.2%. Shares of WWD have gained 31.3% in the past year.
The Zacks Consensus Estimate for Watts Water Technologies fiscal 2024 EPS has improved 0.4% in the past 60 days to $8.35. WTS’s long-term earnings growth rate is 7.8%.
WTS’ earnings surpassed the Zacks Consensus Estimate in each of the last four quarters, the average surprise being 13.5%. Shares of WTS have soared 11.9% in the past year.
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