What happened
On Tuesday, the day before it was slated to publish its latest set of quarterly earnings, Globalstar (GSAT -2.26%) enjoyed a more than 10% lift in its share price. It wasn't only optimism about said earnings -- the company reported a big prepayment from a top business partner that may or may not be a famous tech company.
So what
In a regulatory filing, Globalstar disclosed that it and this partner, which it did not name, on Monday agreed to amend their existing cooperation agreement. One result of the amendment is that the partner will hand over $252 million as a prepayment to Globalstar for the provision of satellite services.
Globalstar said in the filing that it will use these funds for current and future costs related to its business.
This partner is widely speculated to be tech sector titan Apple, which offers an Emergency SOS with Satellite service packed into its current iPhone 14 models. As the name implies, the service allows users not in range of cellular signals or Wi-Fi to send text messages by communicating with satellites. Globalstar is the operator of those satellites.
Now what
Having Apple as a partner is a big deal, as is receiving a prepayment well in the nine-figure range.
Of course, the immediate fate of Globalstar's stock will depend quite a bit on the company's fourth-quarter and full-year 2022 earnings, which are to be published before market open on Wednesday. The few analysts tracking the stock are collectively expecting a 12% rise in revenue to just under $39 million for the quarter, with a net loss of $0.01 per share matching the fourth-quarter 2021 result.
