Iridium Prepares for Q3 Earnings Release: Key Insights to Anticipate

Iridium Communications Set for Earnings Announcement

Iridium Communications (NASDAQ: IRDM) is on the cusp of announcing its third-quarter earnings for 2024. Investors are eagerly awaiting this event, scheduled for October 17, which will occur before the market opens.

According to analyst projections, the revenue consensus for this quarter is approximately $205.7 million, reflecting a 4.1% rise compared to the same period last year. For earnings per share, estimates remain constant at 20 cents, showing no change over the past two months. In the prior year's corresponding quarter, the company's report showed a loss of 1 cent.

In recent performances, IRDM has surpassed earnings estimates set by analysts in two of the last four quarters, fell short once, while matching in another instance, showcasing an average surprise rate of 202.2%. However, over the last year, the company's shares have faced challenges, dropping by 31.2%, contrasting with a 1.3% increase within its sub-industry.

Key Factors Influencing Iridium's Q3 Performance

The upcoming quarter is likely to present a positive trajectory for Iridium, particularly driven by its Service segment's revenue growth and a rising subscriber base. Our estimates suggest this segment's revenue could reach $155.5 million, marking a 2.3% increase over last year's results.

A notable contributor to this growth is the anticipated uplift in commercial service revenues. This revenue segment is likely buoyed by stronger contributions from voice and data services, IoT data, broadband networks, and other data services. We estimate commercial service revenues at $129 million, which would represent a 2.8% ascent compared to the previous year's figures.

Demand for Iridium's push-to-talk services is driving growth in voice and data revenues. Furthermore, the company's commercial IoT services are expected to experience continued support from robust demand in satellite communications and traditional industrial applications.

Additionally, the hosted payload and data services are poised to benefit from the launch of the Iridium Satellite Time and Location service.

Potential Gains in Revenues from Engineering and Support

With an increase in engagements with the U.S. government, particularly tied to the ongoing Space Development Agency contracts, higher revenues from Engineering and Support services are anticipated. For this quarter, we estimate that revenues from the Engineering and Support segment will reach $27.3 million, reflecting a solid 8.1% growth compared to the previous year.

Moreover, the company expects Subscriber Equipment revenues to stabilize after experiencing increased demand due to supply-chain constraints. The projected revenues from this segment are expected to hit $21.2 million, showing a 4% improvement year-over-year.

Recent Developments That Matter

On September 25, 2024, Iridium made headlines when the 3rd Generation Partnership Project (3GPP) endorsed its proposal to enhance Narrowband Internet of Things (NB-IoT) capabilities for Non-Terrestrial Networks. This development is significant as it integrates into the official Work Plan for the 3GPP Release 19, set for completion by late 2025. This initiative showcases Iridium's commitment to expanding global connectivity through its innovative Iridium NTN Direct service, potentially the first global 5G NB-IoT service.

Additionally, on September 19, 2024, the company's board approved a significant stock repurchase program, authorizing up to $500 million—the largest buyback in Iridium's history. This new authorization increases the overall buyback capacity to $1.5 billion, effective until the end of 2027.

The company also introduced the Iridium Certus GMDSS on September 3, 2024, emphasizing its dedication to maritime safety and communications. These new terminals are designed to enhance shipboard hybrid network systems, boosting safety and operational efficiency.

What to Expect for IRDM's Q3 Earnings

While the outlook for Iridium's earnings may appear positive, our analysis indicates uncertainty surrounding an expected earnings beat for this quarter. Factors including a positive Earnings ESP combined with a Zacks Rank could bolster opportunities for a potential earnings surprise, but sadly, that is not affirmed in this instance.

Current Earnings ESP: Iridium currently possesses an Earnings ESP of 0.00%.

Zacks Ranking: Presently, the company holds a Zacks Rank #2, indicating a solid buy sentiment.

Stock Alternatives Worth Considering

As Iridium prepares for its earnings, here are a few stocks you might want to monitor, as these have shown potential for earnings beats based on favorable elements in our research model:

Equifax (NYSE: EFX) currently showcases an Earnings ESP of +1.56% and shares a Zacks Rank #2. It's set to release its third-quarter earnings on October 16, with consensus estimates for earnings at $1.84 per share and revenues of $1.44 billion.

Netflix (NASDAQ: NFLX) holds an Earnings ESP of +1.37% and a Zacks Rank #2, with results scheduled for release on October 17. The consensus estimates for Netflix’s earnings and revenues are at $5.07 per share and $9.77 billion, respectively.

Abbott Laboratories holds an Earnings ESP of +0.18% and shares a Zacks Rank #2, with third-quarter results slated for October 16. The consensus for earnings stands at $1.20 per share and $10.56 billion in revenues.

Frequently Asked Questions

1. When will Iridium report its Q3 earnings?

Iridium is scheduled to announce its Q3 earnings on October 17, before the market opens.

2. What are the revenue estimates for Iridium's Q3 earnings?

The revenue consensus estimate for Iridium's Q3 is expected to be around $205.7 million.

3. How did Iridium's shares perform over the last year?

Iridium's shares have faced a decline of 31.2% in the past year against a slight industry gain.

4. What was the previous earnings per share for Iridium?

In the year-ago quarter, Iridium reported a loss of 1 cent per share.

5. What recent developments have occurred at Iridium?

Iridium has recently launched innovative initiatives such as the Iridium NTN Direct service and announced a substantial stock repurchase program.

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