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Why Intelsat Stock Jumped 16.4% in July

By Steve Symington - Aug 8, 2019 at 8:00AM

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The satellite communications specialist rose ahead of its quarterly report and new satellite launch. Here's what investors need to know.

What happened

Shares of Intelsat (INTE.Q) climbed 16.4% in July, according to data from S&P Global Market Intelligence, partially recouping steep losses earlier this year ahead of both the satellite communications company's second-quarter report (late in the month) and a subsequent satellite launch earlier this week.

On the former, Intelsat's quarterly revenue declined 5% year over year to $509.4 million -- above consensus estimates for revenue closer to $503 million -- translating to a whopping GAAP net loss of $529.7 million, or $3.76 per share. That said, this loss largely reflected a $381.6 million asset impairment charge recognized during the quarter, as an anomaly in early April resulted in the total loss of its in-period Intelsat 29e satellite. Excluding this usual item, Intelsat's net loss would have been closer to $1.05 per share, below estimates for a per-share loss of roughly $0.83.

Stock market charts indicating gains with bars and arrows.

IMAGE SOURCE: GETTY IMAGES.

So what

Intelsat CEO Stephen Spengler lauded progress on the company's "operational priorities," notably including expanding its managed services platforms, as well as signing new business on on its wireless-centric Horizons 3e high-throughput satellite and its government-centric Intelsat 38 satellite.

Perhaps more encouraging, Spenger added that the company has recently "significantly increased" details available to the public of its C-band Alliance proposal to the Federal Communications Commission, through which it hopes to monetize its C-band spectrum assets to "support U.S. leadership in 5G while also protecting essential television, radio and data services currently using" the spectrum.

Now what

On a more recent positive note, on Tuesday Intelsat followed by announcing the successful launch of Intelsat 39, a satellite to provide video distribution and connectivity services for everyone from mobile network operators to government entities and maritime service providers in Africa, Asia, Europe, and the Middle East. 

"Intelsat 39 adds to the breadth of services and vast geographic reach that our global network provides," Spangler stated. "Businesses and communities across three continents will have greater access to robust, reliable and resilient connectivity services whenever and wherever they need it." 

Of course, the stock hardly budged on the announcement considering Intelsat investors largely expected the new satellite launch to go off without a hitch. But as the company continues pushing forward with its operational goals, and makes steady progress toward the eventual monetization of its C-band spectrum assets, it was no surprise to see Intelsat stock bouncing last month.

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