Iridium faces 34-cent earnings test before Rocket Lab deal

Iridium Communications reports third-quarter earnings on Thursday, Oct. 15, with analysts expecting 34 cents a share and $236.3 million in revenue, Investing Australia reported in an Oct. 15 financial-news article.

The result matters for Rocket Lab’s agreed $8 billion acquisition after Iridium earned 9 cents a share in the second quarter, missing the 28-cent consensus estimate by 68%, according to the article.

Revenue for the September quarter is forecast to rise 4.1% from a year earlier, the article said. The McLean, Va.-based satellite operator generated $225.2 million of revenue in the second quarter, up 3.8% year on year and slightly above expectations.

Iridium shares were quoted at $46.73 in the article, above the $42 mean analyst price target. The article said that level implied 10% downside, with eight analysts split evenly between four buy ratings and four hold ratings.

Rocket Lab has described the combination as creating an “end-to-end space company,” according to the article. The planned tie-up would combine Rocket Lab’s launch capabilities with Iridium’s global spectrum assets and satellite communications business.

Iridium’s stockholders approved the transaction in September, with 99.6% of votes cast backing the deal, the article said. The acquisition is expected to close in mid-2027.

The earnings release will test whether Iridium can show more consistent profit after the second-quarter shortfall. Analysts’ earnings and revenue estimates had been unchanged over the previous 60 days, suggesting forecasts were largely on hold before the results.

Investors will also track the company’s revenue mix. The article said analysts are watching momentum in Iridium’s internet-of-things and government services businesses, while the company’s satellite network includes more than 60 operational low-Earth-orbit satellites, which circle closer to Earth than geostationary systems.

Atlas360 reported in July that Rocket Lab’s Iridium deal could add steadier cash flows, while valuation risk remained central for Rocket Lab investors. In September, Atlas360 reported Rocket Lab shares rose after a decade-long Space Force contract award, though that award guaranteed no revenue and required competition for task orders.

The article said Iridium’s forward price-to-earnings ratio was 40.4 times, leaving limited room for disappointment if profit again trails expectations. EBITDA, earnings before interest, taxes, depreciation and amortization, declined 32% over the trailing 12 months, according to the article.

On Oct. 15, investors will compare Iridium’s third-quarter results with analyst expectations for 34 cents a share and $236.3 million in revenue for the September quarter. They will also listen for management commentary on customer retention, current contracts and business development during the transition to Rocket Lab ownership.

The next larger milestone is the mid-2027 expected closing window for Rocket Lab’s $8 billion acquisition of Iridium, following September stockholder approval.

Source: financial-news article, Investing Australia, Oct. 15