ViaSat Q4 Earnings Beat Expectations


Mid cap satellite communications stock and in-flight WiFi playerViaSat, Inc (NASDAQ: VSAT) reported fiscal Q4 earnings after yesterdays market close with Q4 revenue up 12% to $416.4 million and full year revenue up 10% to $1,559.3 million. Segment revenues were the following:

Segment Results

(In millions)

Q4 FY17

Q4 FY16

Year-Over-
Year
Change

FY17

FY16

Year-
Over-Year
Change

Satellite Services


New contract awards

$ 153.0

$ 135.2

13.2%

$ 597.2

$ 511.1

16.8%

Revenues

$ 160.9

$ 145.4


10.6%

$ 629.6

$ 559.2

12.6%

Operating profit3

$ 32.8

$ 22.0

49.3%

$ 131.1

$ 81.8


60.2%

Adjusted EBITDA

$ 75.0

$ 63.7

17.9%

$ 297.4

$ 243.7

22.1%


Commercial Networks

New contract awards

$ 51.3

$ 74.6

(31.3)%

$ 213.8


$ 228.0

(6.3)%

Revenues

$ 59.1

$ 62.2

(5.0)%

$ 244.6

$ 250.7

(2.4)%

Operating loss3


$ (52.5)

$ (40.4)

(29.9)%

$ (180.5)

$ (111.3)

(62.1)%

Adjusted EBITDA

$ (36.5)

$ (26.6)

(37.4)%


$ (119.0)

$ (56.5)

(110.4)%

Government Systems


New contract awards

$ 181.3

$ 241.4

(24.9)%

$ 850.7

$ 744.2

14.3%

Revenues

$ 196.5

$ 164.4


19.5%

$ 685.1

$ 607.5

12.8%

Operating profit 3

$ 25.6

$ 28.7

(10.9)%

$ 96.7

$ 87.1


11.0%

Adjusted EBITDA4

$ 45.0

$ 43.6

3.1%

$ 162.3

$ 143.6

13.1%


1 Attributable to ViaSat, Inc. common stockholders.

2 Amounts include certain backlog adjustments due to contract changes and amendments.

3 Before corporate and amortization of acquired intangible assets.

4 Government Systems’ segment Adjusted EBITDA for the fourth quarter and fiscal year ended March 31, 2016 has been adjusted to exclude noncontrolling interest, net of tax.

5 Backlog does not includeanticipated equipment purchase orders or future recurring internet service revenues under commercial in-flight internet agreements, nor does it include contracts with ViaSat’s residential broadband internet subscribers.


Q4 net income was up 49.4% to $6.7 million and full year revenue was up 9.3% to $23.8million. The Chairman/CEO commented:

“Our strong fourth quarter wrapped up a fiscal year that featured multiple performance records including revenue, cash flow from operations and new contract awards. Performance for both the quarter and full fiscal year were driven by our satellite services operations across the residential, aero and government mobility markets, and outstanding results from our government business, where we are capitalizing on our unique market position and capabilities.With our ViaSat-2 launch scheduled for June 1, we are poised to again set a new benchmark for low-cost bandwidth delivery and we’re making great progress with R&D investments in the ViaSat-3 program.Our strategy is simple: we want to lead the way with the highest speeds and the most bandwidth at the lowest total cost, an approach that will continue to redefine global bandwidth economics and open significant opportunities for ViaSat to disrupt multiple markets.”


ViaSat, Inc is better positioned than its small cap in-flight WiFi stockGogo Inc (NASDAQ: GOGO)rivalas the former is not as dependent on inflight WiFi and related services as the latter is. Last summer, American Airlinesannounced a long expected deal with rival ViaSat, Inc to provide Internet access on about 100 new Boeing jets which has not helped Gogo Incs share price.

A technical chart for ViaSat, Inc shows a fairly steady downtrend since September:


A long term performance chart shows ViaSat, Inc plus mid to large cap communications stockslikeHarris Corporation (NYSE: HRS) and L-3 Communications Holdings, Inc (NYSE: LLL)had been moving in tandem until last yearwhile small cap Gogo Inc has underperformed:


Finally, here is a quick recap of ViaSat, Incs recent earnings history along with EPS estimate trends from the Yahoo! Finance analyst estimates page going into the current earnings report:

3/30/20166/29/20169/29/201612/30/2016
EPS Est. 0.37 0.26 0.27 0.29
EPS Actual 0.29 0.23 0.4 0.29
Difference -0.08 -0.03 0.13 N/A
Surprise % -21.60% -11.50% 48.10% N/A
EPS TrendCurrent Qtr. (Mar 2017)Next Qtr. (Jun 2017)Current Year (2017)Next Year (2018)
Current Estimate 0.28 0.09 1.13 0.59
7 Days Ago 0.28 0.09 1.13 0.59
30 Days Ago 0.28 0.09 1.13 0.59
60 Days Ago 0.28 0.08 1.13 0.68
90 Days Ago 0.25 0.06 1.11 0.65