Iridium Earnings, Revenue Top Estimates As Buyback Kicks In

Iridium Communications, Inc. (IRDM) reported earnings and revenue for the first quarter that exceeded Wall Street expectations. IRDM shares rose as the company reaffirmed its outlook for 2023.

Iridium's adjusted earnings for the period ending March 31 were 8 cents per share, compared to a 2-cent profit one year ago. Revenue grew 22%, to $205.3 millions. This exceeded the $188 million estimate.

Iridium reported that earnings before interest taxes, depreciation, and amortization (EBITDA), also known as EBITDA rose by 8% to $111.9 millions.

Iridium purchased more than $53 millions of common stock during the third quarter. This is up from $7 Million in the previous quarter. Analysts expect that free cash flow will increase and shareholders' returns to rise as capital expenditures for the company are expected to decrease.

The company also stuck to its outlook for 2023. Iridium anticipates a service revenue increase of approximately 10% to $588 million.

IRDM rose 3.4% in morning trading today to reach 60.65. Iridium's stock is expected to rise 13% by 2023.

IRDM Stock: Smartphones A New Market

Iridium also offers wholesale data services through its global satellite network. It is pushing satellite-based smartphone service with Qualcomm (QCOM).

Revenue from the new smartphone partnership should start in 2024. Iridium announced in January that they would be partnering with Qualcomm to provide satellite-based two-way messaging services. Qualcomm's 5G-enabled modems will be required on all new smartphones.

Iridium is currently trading in a flat base of nine weeks with an entry level of 65.51.

Iridium's largest customer is the U.S. Government. The aviation and maritime industries are also customers.

According to IBD StockCheckup, the relative strength rating of IRDM is 91, out of a maximum possible 99. RS Ratings of 80 and above are usually associated with the best stocks.