Iridium Gearing Up to Report Q3 Earnings: Here's What to Expect

Iridium Communications IRDM is slated to release third-quarter 2024 earnings on Oct. 17, before market open.

The Zacks Consensus estimate for revenues is pegged at $205.7 million, indicating an increase of 4.1% from the year-ago level. The consensus estimate for earnings per share is pegged at 20 cents, unchanged in the past 60 days. In the year-ago quarter, the company reported a loss of 1 cent.

IRDM’s earnings beat the Zacks Consensus Estimate in two of the trailing four quarters, missed once and matched the same in the remaining quarter with the average surprise being 202.2%. In the past year, shares have lost 31.2% against sub-industry’s gain of 1.3%.

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Factors to Focus on Ahead of IRDM’s Q3 Earnings

Iridium’s third-quarter performance is likely to have gained momentum in the Service segment’s revenues and increasing subscriber base. Our estimate for segmental revenues is pegged at $155.5 million, implying a jump of 2.3% from a year-ago reported figure.

Strengthening commercial service revenues is a key catalyst. Commercial service revenues are likely to have been aided by strength in voice and data, IoT data, broadband, hosted payload and other data service business lines. We estimate commercial service revenues to be $129 million, indicating a 2.8% climb from the prior-year actual.

Revenues from voice and data are gaining from higher demand for Iridium’s push-to-talk services. Commercial IoT revenues are likely to have benefited from steady demand for personal satellite communications and traditional industrial services.

Hosted payload and other data service segment is also expected to have benefited from the new Iridium Satellite Time and Location offering.

Iridium Communications Inc Price and EPS Surprise

Iridium Communications Inc price-eps-surprise | Iridium Communications Inc Quote

Higher Engineering and Support revenues (due to a rise in activity with the U.S. government, especially the ongoing work on the Space Development Agency contract) bode well. IRDM expects revenues from the EMSS contract with the U.S. government to increase in the second half of 2024 with a “contractual step-up” in mid-September. Our estimate for quarterly revenues from the Engineering and Support segment is pegged at $27.3 million, which is up 8.1% from the year-earlier level.

Management expects Subscriber Equipment revenues to return to more normalized levels as increased demand, owing to supply-chain constraints and customer inventory buildup, stabilizes. Our estimate for quarterly revenues from the Subscriber Equipment segment is pegged at $21.2 million, indicating a 4% increase from a year ago.

Global macroeconomic weakness and inflation remain concerning. Increasing competition in the satellite communications space and higher selling, general and administrative costs and research and development expenses are other headwinds.

Key Recent Developments

On Sept. 25, 2024, Iridium announced that the 3rd Generation Partnership Project (3GPP) approved its offer to broaden the capability of Narrowband Internet of Things (NB-IoT) for Non-Terrestrial Networks into the official Work Plan for 3GPP Release 19 (set to conclude in the fourth quarter of 2025). This initiative expands the company’s reach in global connectivity through its latest service, Iridium NTN Direct, which is expected to be the world’s first global 5G NB-IoT service.

On Sept. 19, 2024, Iridium announced its fourth stock repurchase authorization in four years. The $500 million authorization, approved by its board of directors, is the largest in the company’s history. It extends the total buyback authorization to $1.5 billion through Dec. 31, 2027.

On Sept. 3, 2024, the company introduced Iridium Certus GMDSS, making significant strides in maritime safety, compliance and communication. These terminals form a significant part of any ship’s hybrid network system with improved cost structure, efficiency and performance in maritime safety and security.

What Does Our Model Say for IRDM in Q3?

Our proven model does not conclusively predict an earnings beat for Iridium this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. However, this is not the case here.

Earnings ESP: Iridium has an Earnings ESP of 0.00%.

Zacks Rank: Iridium currently carries a Zacks Rank #2.

Stocks to Consider

Here are some stocks you may consider, as our model shows that these have the right combination of elements to beat on earnings this season.

Equifax EFX currently has an Earnings ESP of +1.56% and a Zacks Rank #2.

It is scheduled to release results for the third quarter of 2024 on Oct. 16. The Zacks Consensus Estimate for Equifax’s to-be-reported quarter’s earnings and revenues is pegged at $1.84 per share and $1.44 billion, respectively. Shares of EFX have gained 58.5% in the past year.

Netflix NFLX has an Earnings ESP of +1.37% and a Zacks Rank #2 at present. It is scheduled to release third-quarter 2024 results on Oct. 17. The Zacks Consensus Estimate for Netflix’s to-be-reported quarter’s earnings and revenues is pegged at $5.07 per share and $9.77 billion, respectively. Shares of NFLX have gained 100.3% in the past year.

Abbott Laboratories has an Earnings ESP of +0.18% and a Zacks Rank #2 at present. It is scheduled to release third-quarter 2024 results on Oct. 16. The Zacks Consensus Estimate for Abbott’s to-be-reported quarter’s earnings and revenues is pegged at $1.20 per share and $10.56 billion, respectively. Shares of ABT have gained 25.9% in the past year.

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