Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What's happening: Shares of DigitalGlobe (DGI) were up 15% as of 12:30 p.m. ET Friday after the satellite image and geospatial solutions provider announced better-than-expected fourth-quarter results.
Quarterly revenue climbed 9.4% year over year to $185.7 million, which translated to a 21% decline in net income available to common shareholders to $10.7 million, or $0.14 per share. Note that the latter figure was bolstered by DigitalGlobe's repurchase of over 2.2 million shares of stock for $60.1 million during the quarter. Analysts, on average, were only expecting earnings of $0.06 per share on sales of $180.2 million.
For the full year 2014, revenue rose 6.8% to $654.6 million, while net income available to common shareholders was $13.9 million, or $0.18 per share. 2014 adjusted earnings before interest, taxes, depreciation, and amortization was $286.2 million. Wall Street was modeling 2014 earnings of just $0.11 per share on sales of $650 million.
Why it's happening: With regard to the year-over-year decrease in net income, remember that DigitalGlobe spent much of 2014 investing heavily to position its business for future growth and improved financial performance.
"In 2015, we will accelerate growth through increased capacity and new product offerings that leverage our data, analytics and unique geospatial information capabilities," said DigitalGlobe CEO Jeffrey Tarr. "We will also remain keenly focused on driving operating efficiencies in order to both invest in growth and return capital to shareowners."
DigitalGlobe expects 2015 revenue of $725 million-$750 million, or growth of 10.8%-14.6% over last year. 2015 adjusted EBITDA is expected to be $355 million-$375 million, good for growth of 24%-31%. Capital expenditures will also fall around 40% from last year to $110 million.
In the end, this was an impressive beat that the market is right to celebrate. As DigitalGlobe continues to deliver on its long-term promises from here, patient shareholders should be able to look forward to finally enjoying the fruits of the company's past investments.
