Iridium Communications Earnings: Here’s Why Investors are Selling Shares Now

Iridium Communications Inc. (NASDAQ:IRDM) delivered a profit and missed Wall Street’s expectations, AND came up short on beating the revenue expectation. The revenue miss is a negative sign to shareholders seeking high growth out of the company. Shares are down 4.65%.

Iridium Communications Inc. Earnings Cheat Sheet

Results: Adjusted Earnings Per Share increased 72.73% to $0.19 in the quarter versus EPS of $0.11 in the year-earlier quarter.

Revenue: Decreased 2.82% to $92.3 million from the year-earlier quarter.

Actual vs. Wall St. Expectations: Iridium Communications Inc. reported adjusted EPS income of $0.19 per share. By that measure, the company missed the mean analyst estimate of $0.21. It missed the average revenue estimate of $98.14 million.

Quoting Management: “Our satellite network is healthy and continues to serve our customers well,” said Matt Desch, CEO, Iridium. “The Iridium NEXT build is on budget and slightly ahead of schedule. Our partners continue to innovate around the industry’s most robust product portfolio, meeting the needs of customers across a diverse spectrum of business lines. Highly profitable service revenue grew to represent 71% of total revenue in 2012, while our operating cash flow margin expanded from 50% to 54%, which is well on the way to our 2015 objective of 60%. While our annual service revenue growth of 4% fell short of our full-year target, the long-term growth potential of our business remains intact.”

Key Stats (on next page)…