Speedcast profit hits the brakes
Stock
Speedcast (SDA) $2.23 as at 02/07/2019
Event
Remote and satellite connectivity provider Speedcast has tumbled to 4 year lows early in the session today, down 36% on a downgraded outlook ahead of their half year results. Speedcast provide infrastructure and technology to a range of clients such as governments, energy and mining and maritime players.
The communications name guided first half EBITDA to $US60m - $US64m, around flat on the half despite including a full contribution from the Globecomm acquisition that was completed in December. Speedcast also moved the goalposts for the full year expectations, revising guidance down around 13% at the midpoint on the EBITDA line to $US140m to $US150m, corresponding to a 10% miss to consensus estimates.
The company blamed the poor guidance on a number of contributing factors, with weaker emerging markets, NBN payment delays and timing of system integrations on a number of contracts in the energy space at the top of the list with the company calling these “non-structural” despite appearing to impact outlook as well as past performance.
Speedcast’s acquisition of Globecomm is also making investors nervous, with the company lowering expectations for the full year contribution of the purchase by around 20% despite maintaining cost synergy guidance.
Speedcast (SDA) Chart
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