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Viasat (VSAT) Q1 Loss Narrower Than Expected, Revenues Rise

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Viasat (VSAT) Q1 Loss Narrower Than Expected, Revenues Rise

Viasat's (VSAT) fiscal Q1 revenues increase 15.5% year over year primarily driven by strong performance in its all three segments.

Viasat Inc. VSAT reported better-than-expected results in the first quarter of fiscal 2019.

Net Loss

On a GAAP basis, net loss in the reported quarter totaled $34 million or a loss of 57 cents per share compared with net loss of $9 million or a loss of 16 cents in the year-ago quarter. The deterioration in the bottom line despite top-line growth was primarily due to higher operating expenses.

Viasat Inc. Price, Consensus and EPS Surprise

 

Viasat Inc. Price, Consensus and EPS Surprise | Viasat Inc. Quote

In the reported quarter, non-GAAP net loss was $17.5 million or a loss of 30 cents per share against net income of $2.5 million or 4 cents in the year-earlier quarter. Notably, adjusted loss was narrower than the Zacks Consensus Estimate of a loss of 36 cents.

Revenues

Quarterly total revenues increased 15.5% year over year to $438.9 million, primarily driven by strong performance in its all three segments. The top line surpassed the Zacks Consensus Estimate of $435.05 million.

Segmental Performance

Revenues at Satellite Services increased 0.9% year over year to $153.6 million. The segment’s operating loss was $29.9 million against a profit of $18.8 million in the year-ago quarter. Adjusted EBITDA was $34.3 million, down 44.8% year over year. This was due to the rise in fixed operating expenses related to the launch of ViaSat-2 service and IFC ramp.

Commercial Networks revenues were up 110.1% year over year to $95.1 million, primarily driven by strong performance in the company's scaling IFC equipment business. Operating loss was $47 million compared with a loss of $66.1 million in the year-ago quarter. Adjusted EBITDA was a negative $32.7 million compared with a negative $50 million a year ago, reflecting decline in R&D expenses.

Government Systems revenues increased 4.2% year over year to $190.2 million, driven by new contract awards. Operating profit was $24.9 million, down 23.5% year over year. Adjusted EBITDA was $43.5 million, down 11.7% year over year, reflecting increased investments in bid and proposal activities and R&D targeted at additional growth opportunities.

Liquidity

As of Jun 30, 2018, Viasat had $54.8 million of cash and cash equivalents compared with $71.4 million as of Mar 31, 2018. The company’s long-term debt was $381.7 million compared with $287.5 million as of Mar 31, 2018.

Notable Developments

In June, Viasat launched the fastest satellite Internet service for businesses across the United States. Notably, it is offering unlimited and metered data plan services with download speed ranging from 35 Megabits per second (Mbps) across most parts of the nation to 100 Mbps in select areas.

The global communications company had launched the commercial service of ViaSat-2 in the fourth quarter of fiscal 2018, which helped it become the first satellite Internet service provider globally to offer plans with download speeds of up to 100 Mbps.

This apart, the company augmented its footprint in the U.K. defence market with the acquisition of Horsebridge Defence and Security. The transaction will extend its long-term business relationship with the country’s Armed Forces and will enable it to provide superior support system for several Ministry of Defence programs in the country.

Viasat currently carries a Zacks Rank #3 (Hold).

Stocks to Consider

Some better-ranked stocks in the same space are Sonus Networks, Inc. RBBN, Clearfield, Inc. CLFD and QUALCOMM Incorporated QCOM. While Sonus Networks sports a Zacks Rank #1 (Strong Buy), Clearfield and QUALCOMM carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Sonus Networks surpassed estimates in each of the trailing four quarters with an average beat of 168.11%.

Clearfield exceeded estimates in each of the trailing four quarters with an average beat of 52.78%.

QUALCOMM surpassed estimates in each of the trailing four quarters with an average beat of 19.75%.

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