Globalstar Revenues, Earnings Drop While Adding Subscribers
Globalstar Inc. reported revenues of $23.2 million in the 2007 first quarter, down from $30.3 million in the same period a year ago, the company announced May 14.
Service revenue was $17.5 million in the first three months of 2007, down from $20.7 million in the 2006 first quarter, while subscriber equipment sales slipped from $9.6 million to $5.7 million over the same period.
Globalstar posted a profit of $400,000 in the 2007 first quarter, down from $21.4 million a year ago, which included an $18.8 million tax benefit.
Globalstar closed the first quarter of 2007 with about 272,000 total subscribers, an increase of about 10 percent from the end of the 2006 first quarter. The company added about 8,800 net new subscribers during the quarter.
In February, Globalstar warned customers that its satellite constellation is plagued by degraded performance, and that service loss could begin as early as 2008.
"Despite a difficult quarter which included a number of technical challenges while dealing with negative competitive marketing and sales tactics, we continued to show subscriber growth and decreased monthly churn,” Jay Monroe, Globalstar’s chairman and CEO, said in a statement.
"The service issues related to the realignment of our constellation that occurred during the quarter and the new concerns about the service life of our satellites had a negative impact on our customers and distributors. As a result, we experienced quarterly decreases in net income, adjusted EBITDA and service revenue.”