ViaSat (VSAT) Posts Q3 Loss Ahead Of ViaSat-2 Service Launch
Zacks Investment Research | Feb 08, 2018 10:17PM ET
ViaSat Inc. (NASDAQ:VSAT) reported third-quarter fiscal 2018 adjusted loss of 4 cents per share, down drastically from earnings of 29 cents recorded in the year-ago quarter. With only a marginal gain in quarterly revenues, ViaSat’s earnings plummeted as the company ramped up expenses ahead of offering subscribers service with its new high-speed satellite.
Further, the company recorded an additional income-tax expense of approximately $12 million in relation to the recent tax reforms.
On a GAAP basis, the company swung to a net loss of 42 cents per share, in stark contrast to earnings of 8 cents recorded in the year-ago period.
Inside the Headlines
The company posted revenues of $381.8 million in the fiscal third quarter, which marginally lagged the Zacks Consensus Estimate of $388.6 million. Revenues inched up 0.3% compared to the prior-year quarter tally. Strong growth in government business drove top-line performance, which was offset by contraction in Satellite Services revenues. Revenue growth was strained owing to the capacity constraints that the company is facing ahead of the ViaSat-2 commercial service launch.
New contract awards (up 23.2% to $436 million) rose sharply in the quarter.
Segment wise, Satellite Services revenues continued the downward trend and slipped sharply (down 9.7% year over year) to $144.5 million, due to a modest downtick in residential subscriber count. The decline was also attributable to the prior-year benefit of $6.8 million connected to proceeds under the Loral settlement. Notably, Average Revenue per User (ARPU) in ViaSat's residential broadband Internet business grew 8% year over yearto a new record high of $68.23.
Commercial Networks’ performance turned around this quarter, as its revenues inched up 1.9% on a year-over-year basis to $55.5 million, driven byhigher airborne terminal sales.
On the other hand, Government Systems continued the impressive growth trajectory and reported solid revenues of $181.8 million, up 9.5% year over year, driven by growth across the broad product service portfolio. Impressive growth in revenues drove solid operating profit (up 23% year over year) and Adjusted EBITDA (up 19.7% year over year) for the reported quarter.
During the quarter, sales backlog grew 6.3% year over year to $1,128.7 million, led by record contribution from the Government Systems segment.
Adjusted EBITDA plunged 33% from the comparable quarter last year to $56.2 million, hurt by elevated start-up costs associated with the ViaSat-2 service launch, higher R&D outlay and costs related to planned large-scale service ramp-up in commercial air. Also, completion of the Loral settlement affected the company’s EBITDA. Nevertheless, sequentially, R&D levels declined $6 million, as ViaSat begins transitioning to the ViaSat-3 payload construction phase.
ViaSat, Inc. Price, Consensus and EPS Surprise
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