Inmarsat revenue boosted by LightSquared agreement
Satellite communications company Inmarsat PLC posted a 15 percent rise in first-quarter revenue, as payments arising from its cooperation agreement with U.S. broadband network LightSquared offset a slight decline in its mobile services revenue.
Inmarsat, which provides satellite telephony and e-mail services to the shipping and airline industries, reiterated its guidance for 2011 of revenue growth between 2% and 4% in mobile satellite services division, or MSS, its largest division.
The company’s shares climbed following the results, and at 0830 GMT traded up 3.8% at 615.5 pence, making the company the biggest riser in the FTSE 100 index.
MSS revenue for the quarter fell marginally to $180.6 million, but this was more than offset by the LightSquared deal, under which the U.S. firm is paying Inmarsat to use some of its spectrum.
Inmarsat said it installed 2,880 new satellite terminals, but lower data prices on its new generation of broadband terminals led to the revenue decline. However, Chief Executive Andrew Suakawaty told reporters that average data usage is climbing and should offset the pricing impact over time.
The company doesn’t report full quarterly results but said subsidiary Inmarsat Group Ltd., which represents the majority of the business, posted a pretax profit for the three months to March 31 of $124.8 million, up 51%.
Revenue for the group as a whole was $323.9 million.
Mark James, an analyst at Liberum Capital, said the first-quarter numbers were broadly in line with consensus expectations. Still, James said a 3% increase in maritime revenue was likely to be well-received by the market, given that weak growth and outlook in the sector prompted a major sell-off of the firm’s shares at the time of its final results, sending them 10% lower on March 7.