Globalstar Revenue, Profits Fall In Second Quarter
[08/16/07 – Satellite Today] Globalstar Inc. reported a gain in subscribers in the 2007 second quarter but posted a larger loss as revenues declined, the company announced Aug. 14.
Total revenue in the second quarter of 2007 was $25.8 million compared to $38.4 million during the same period in 2006. Revenue for the first half of 2007 was $49 million, compared to $68.7 million in the first half of 2006. Globalstar credited the decline to lower subscriber equipment sales during the first six months of 2007 due to abnormally strong second quarter sales in 2006 in advance of the hurricane season and the decreased sales in 2007 due to concerns regarding the company’s satellite constellation.
In February, Globalstar warned that customers could begin to experience service loss due to satellite problems. The company’s second-generation satellites are not expected to be available until summer 2009.
Net loss for the second quarter of 2007 was $12.7 million compared to $800,000 in the same period of 2006. In the 2007 second quarter, Globalstar recognized a $17.3 million asset impairment charge related to a write-down of its first-generation phone and accessory inventory.
Net subscriber additions during the 2007 second quarter of 2007 were about 6,100. Globalstar closed June with about 278,000 subscribers, up about 41,000 from the end of the 2006 second quarter.
"Globalstar had a challenging second quarter however we continued to show an increased number of subscribers,” Jay Monroe, chairman and CEO of Globalstar, said in a statement. “… We believe the issues related to our two-way communications services and the continued concerns about the service life of our satellites resulted in quarterly decreases in net income, adjusted EBITDA and service revenue."