[Satellite TODAY 06-04-10] Comtech’s 2010 third quarter financial results, released June 3, shattered market expectations with revenues increasing 68 percent to $216 million over the same period in 2009, beating consensus projections by 14 percent.
Comtech’s earnings-per-share grew 31 percent to $0.67. The company’s Mobile Data segment revenue, aided by accelerated shipments of MTS computers, jumped $50 million, sequentially, to $134 million.
Raymond James analyst Chris Quilty said Comtech Mobile EF Data’s revenue performance far exceeded his own forecast of $113 million. “Although the [MTS computer] order has been painfully slow to ship and Comtech warned that $90-100 million of revenues could slip into 2011, it now appears that shipments back on track and could potentially be ‘pulled forward’ into the fourth quarter,” Quilty said in a report. “Mobile Data EBIT margins also were surprisingly strong at 20.5 percent against our forecast of 14.4 percent in light of the heavy volume of (low-margin) MTS computers shipped in the quarter. If these factors can be sustained, our 2011 [Comtech] EBIT forecast of 22.5 percent could prove to be too low.”
Comtech’s bookings jumped $100 million to $181 million. The company said commercial spending is beginning to improve as it exits the quarter with a $411 million backlog.
Comtech recently was awarded ceiling increases for both the Blue Force Tracking and MTS contracts with the U.S. military. The Blue Force Tracking-2 source selection is scheduled for later this year. Quilty said the company’s chances of being selected are strong. “We have a high degree of confidence that Comtech will eventually win this competition and investors will want to own the stock before the announcement is made official.”
Comtech’s Third Quarter Growth Exceeds Expectations
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