Restructuring Costs Hit Intelsat Bottom Line In First Quarter
[Satellite Today – 5-15-08] Intelsat Ltd. reported an 11 percent increase in revenues in the 2008 first quarter, but restructuring and transaction costs pushed the satellite operator’s losses up more than 160 percent, Intelsat announced May 15.
Intelsat lost $412.7 million in the first three months of 2008, compared to a loss of $115.1 million for the same period in 2007. The 2008 first quarter included $313.1 million in restructuring and transaction costs incurred in connection with the February acquisition of Intelsat by a group of equity investors for $16.4 billion.
The company reported $572.7 million in revenue in the 2008 first quarter, up from $518.2 for 2007’s first quarter. Intelsat attributed the gains to increased sales of transponder services and managed services to network services customers and government customers.
Transponder services revenue increased $40.9 million to $437.5 million, due primarily to new business, service expansions and improved contract terms from network services customers in Europe, North America and Africa; increased demand from direct-to-home and programmer media customers in Europe and North America; and increased government demand in North America.
Managed services revenue increased $15.5 million to $73.8 million, primarily driven by the growth of Internet-related and network broadband services sold to network services customers as well as increased sales of private line services to government customers. Mobile satellite services and other revenue increased $4.3 million to $24 million, primarily due to increased use of mobile satellite services by government customers and increased sales of professional services to satellite operators and other customers of the satellite-related services business.
“Operationally, we are performing to our plan,” CEO Dave McGlade said in a statement. “Costs are in line with our objectives and margins are expanding, even as we invest in new service introductions to capitalize on mobility and broadband opportunities. We are building value through disciplined management of our fleet, optimizing existing transponder capacity and strategically replacing satellites. We are pleased with our first quarter results, and remain focused on the continued successful execution of our business strategy.”