Iridium loss wider than expected amid poor sales
Monday April 26, 2:44 pm Eastern Time
NEW YORK, April 26 (Reuters) - Satellite phone company Iridium LLC.'s(IRID - news)
first quarter loss increased by 42 percent on Monday as the company's results fell short of
Wall Street's expectations amid disappointing sales.
The Washington,D.C-based company, whose two top executives have quit in less than a
month, posted a first quarter net loss of $505.4 million or $3.45 per class 1 interest unit
compared with a loss of $203.57 million or $1.45 per unit a year earlier.
Analysts expected the firm to post a first quarter loss of $3.17 per unit, according to research firm First Call. Iridium shares
were at $16.31 in late morning trade, up $0.31.
Iridium, a $5 billion consortium that allows paging and wireless telephony anywhere in the world from a single phone number,
posted revenues of $1.45 million after reporting no revenue a year earlier. Some investment firms expected revenue around the
$7.5 million mark.
''We were very disappointed with our first quarter customer and revenue numbers,'' Iridium Interim Chief Executive John
Richardson said in a statement. ''Clearly we have a great deal of work to do to improve our marketing, distribution and sales.''
The company said limited availability of handset models and accessories in many markets and delays to field sufficient
salespeople hit revenues. A number of distribution and importation issues also continue to hurt product availability and the firm
is reconsidering product and service prices to boost sales, Iridium said.
Founded by Motorola (MOT - news), the 19-member group that forms Iridium is made up of industrial giants such as
Lockheed Martin Corp (LMT - news) and Raytheon Co. (RTNa - news) . The Iridium project -- a global network of
low-earth-orbit satellites linked to ground stations - has been dogged by service and equipment delays and has also faced
financing headaches.
Riyad Said, an analyst with Friedman Billings Ramsey, said the market had expected light results and Iridium stock sold off last
week. ''I think they understand what they need to do from a management standpoint,'' Said said in a telephone interview.
''Now its just a matter of getting there.''
Copyright © 1999 Reuters Limited. All rights reserved. |
