Iridium Communications (IRDM) Gains Despite Earnings Miss

NEW YORK (TheStreet) -- Iridium Communications (IRDM) was gaining 10.1% to $6.88 Thursday despite missing analysts' earnings estimates for the quarter.

For the fourth quarter the satellite communications company posted earnings of 18 cents a share, missing the Capital IQ Consensus Estimate of 21 cents a share by 3 cents. Revenue rose 6.4% from the year-ago quarter to $98.2 million while analysts predicted revenue of $98.89 million.

The company expects revenue to grow by 2% to 4% for the full-year 2014. Iridium expects full-year 2014 OEBITDA between $205 million and $215 million. OEBITDA for 2013 was $201.1 million.

Must read: Iridium Communications Stock Sees Short Interest Increase 10.6%

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TheStreet Ratings team rates IRIDIUM COMMUNICATIONS INC as a "hold" with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:

"We rate IRIDIUM COMMUNICATIONS INC (IRDM) a HOLD. The primary factors that have impacted our rating are mixed ? some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its revenue growth, good cash flow from operations and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income, disappointing return on equity and a generally disappointing performance in the stock itself."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • IRDM's revenue growth has slightly outpaced the industry average of 0.3%. Since the same quarter one year prior, revenues slightly increased by 0.1%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • Net operating cash flow has slightly increased to $44.07 million or 1.71% when compared to the same quarter last year. In addition, IRIDIUM COMMUNICATIONS INC has also modestly surpassed the industry average cash flow growth rate of -2.22%.
  • Even though the current debt-to-equity ratio is 1.01, it is still below the industry average, suggesting that this level of debt is acceptable within the Diversified Telecommunication Services industry. Even though the debt-to-equity ratio shows mixed results, the company's quick ratio of 3.04 is very high and demonstrates very strong liquidity.
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Diversified Telecommunication Services industry. The net income has decreased by 7.0% when compared to the same quarter one year ago, dropping from $17.84 million to $16.59 million.
  • The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. When compared to other companies in the Diversified Telecommunication Services industry and the overall market, IRIDIUM COMMUNICATIONS INC's return on equity is below that of both the industry average and the S&P 500.
  • You can view the full analysis from the report here: IRDM Ratings Report

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