What happened

Shares of satellite-communications company Viasat Inc. (NASDAQ:VSAT) closed 17.1% lower on Friday after reporting a big earnings miss -- despite a revenue beat.

According to Yahoo! Finance, analysts were looking for Viasat to report $0.50 per share in losses on sales of $435.1 million for its fiscal first-quarter 2019. Viasat beat the latter number, reporting sales of $438.9 million. Its GAAP loss for the quarter, however, was a bigger-than-expected $0.57 per share.

Satellite orbiting Earth

A new satellite is helping Viasat book more sales -- and lose more money. Image source: Getty Images.

So what

Viasat's sales climbed 16% year over year, but its losses ballooned even bigger -- up more than 250% from the $0.16 per share lost in last year's Q1. Management attributed the loss to greater spending in the quarter on "fixed-cost investments in ViaSat-2 network infrastructure" -- ViaSat-2 being the company's newest high-throughput broadband sat -- as well as spending on "business infrastructure" and also "marketing expenses for Viasat's residential broadband services."

Now what

That marketing appears to have paid off -- not just in the form of greater sales in Q1, but also new contract awards that totaled $570 million. Viasat landed 29% more contracts in terms of dollar value last quarter than in the year-ago quarter. It also "booked" more contracts than it "billed" as revenue in the quarter, giving the company a book-to-bill ratio of 1.3 that promises continued revenue growth going forward.

Analysts currently forecast that revenues that grew 16% in Q2 will end up growing 24% for the year, as a whole, and a further 19% in fiscal 2020 -- and then 16% more in 2021. The more contracts Viasat books, the more likely that is to happen.

Rich Smith has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.