Why Iridium Communications Shares Plunged
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What: Shares of Iridium Communications have plunged today by as much as 19% after the company reported earnings that fell short of expectations.
So what: Revenue in the second quarter added up to $94.7 million, a bit light compared to the consensus estimate of $99.3 million. Net income was $15.4 million, or $0.18 per share, which also looked soft next to the $0.22 per share profit that the Street was modeling for. Declining revenue and higher projected warranty costs adversely affected results.
Now what: CEO Matt Desch said the company continues to see short-term challenges in parts of the business, and as a result Iridium is reducing its long-term outlook for the year. Full-year billable subscriber growth is now expected in the range of 10% to 15%, down from the prior forecast of 15% to 20% growth. Operational EBITDA should be $210 million, down from the previous guidance of $215 million to $225 million.
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Fool contributor Evan Niu, CFA, has no position in any stocks mentioned. The Motley Fool owns shares of Iridium Communications. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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