Iridium Communications early Thursday reported first-quarter earnings and revenue that topped Wall Street targets. IRDM stock surged as the company reiterated its full-year 2023 outlook.
For the period ended March 31, Iridium earnings came in at 8 cents per share on an adjusted basis vs. 2-cent profit a year earlier. Revenue rose 22% to $205.3 million, topping estimates of $188 million.
Iridium said earnings before interest, taxes, depreciation and amortization, known as EBITDA, rose 8% to $111.9 million.
During the quarter, Iridium repurchased more than $53 million of common stock, up from $7 million in the previous quarter. With lower capital spending ahead for the company, analysts expect free cash flow and shareholder returns to increase.
In addition, the company stuck with its full-year 2023 outlook. Iridium expects service revenue growth of about 10% to roughly $588 million.
On the stock market today, IRDM stock jumped 10.9% to close at 65.03.
IRDM Stock: Smartphones A New Market
Further, Iridium provides wholesale data services via its global satellite system. With partner Qualcomm, it's pushing into satellite-based smartphone services.
The new smartphone partnership is expected to generate revenue in 2024. Iridium and Qualcomm in January announced the partnership for satellite-based, two-way text-messaging services. New smartphones will need to be equipped with Qualcomm's 5G modems.
In addition, Iridium stock currently trades in a nine-week flat base with an entry point of 65.51.
The U.S. government has been Iridium's biggest customer for data services. Other customers are in the aviation and maritime industries.
Meanwhile, the Relative Strength Rating of IRDM stock is 91 out of a best-possible 99, according to IBD Stock Checkup. The best stocks tend to have an RS Rating of 80 or better.
Follow Reinhardt Krause on Twitter @reinhardtk_tech for updates on 5G wireless, artificial intelligence, cybersecurity and cloud computing.
