The 10-second takeaway
For the quarter ended Sep. 30 (Q3), Iridium Communications missed estimates on revenues and missed estimates on earnings per share.
Compared to the prior-year quarter, revenue shrank slightly and GAAP earnings per share increased significantly.
Margins grew across the board.
Iridium Communications logged revenue of $100.4 million. The seven analysts polled by S&P Capital IQ expected sales of $104.4 million on the same basis. GAAP reported sales were 1.6% lower than the prior-year quarter's $102.1 million.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.
EPS came in at $0.23. The seven earnings estimates compiled by S&P Capital IQ predicted $0.25 per share. GAAP EPS of $0.24 for Q3 were 60% higher than the prior-year quarter's $0.15 per share.
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.
For the quarter, gross margin was 71.9%, 280 basis points better than the prior-year quarter. Operating margin was 31.5%, 780 basis points better than the prior-year quarter. Net margin was 17.8%, 670 basis points better than the prior-year quarter.
Next quarter's average estimate for revenue is $99.9 million. On the bottom line, the average EPS estimate is $0.23.
Next year's average estimate for revenue is $394.3 million. The average EPS estimate is $0.87.
The stock has a four-star rating (out of five) at Motley Fool CAPS, with 187 members out of 195 rating the stock outperform, and eight members rating it underperform. Among 52 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 49 give Iridium Communications a green thumbs-up, and three give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Iridium Communications is outperform, with an average price target of $10.50.
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Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor of Motley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. The Motley Fool owns shares of Iridium Communications. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.