* Q2 core earnings $174 mln vs $176 mln, beating
* Shares up 6 pct
* Sees possible modest delay in new satellite launch
By Paul Sandle
LONDON, Aug 2 Satellite operator Inmarsat
said strong growth in demand for broadband
communications on ships and aircraft was countering U.S. defence
spending cuts, and had helped it beat earnings expectations in
the second quarter.
The company, which provides communications to shipping,
aircraft and remote locations worldwide, reported core earnings
of $174 million, a slight dip on $176 million a year ago, but
well ahead of market expectations.
"It's a steady quarter," chief executive Rupert Pearce said
in an interview on Friday. "The maritime franchise continues to
show very solid growth, with data revenues up 9 percent."
The company was on track to achieve the top end of its
target of 0-2 percent compound annual growth in maritime
revenues in the period 2011-2013, he said.
Shares in the group rose to a three-month high of 725 pence
in early deals on Friday after the results. They were trading up
6 percent at 717 pence by 0813 GMT, outperforming a 0.3 percent
stronger mid-cap index.
Analysts at Jefferies said Inmarsat was delivering on
multiple fronts, and had posted core earnings 9.5 percent ahead
of its forecast.
"We have seen outperformance and continued strong subscriber
growth in the core MSS (maritime) business," they said.
Inmarsat said it was also seeing good growth in aviation,
with revenues up 13.2 percent in the first half, thanks in part
to demand from commercial airlines such as Emirates.
But overall revenue for the second quarter dipped slightly,
from $394 million to $391 million, because of defence cuts.
"(We are) still seeing a little bit of paralysis, the
pipeline has slipped...," Pearce said.
"Tough times, but if you take a longer term view (...) in an
era of increasing budget constraints, there's a likelihood of
increasing reliance on commercial satcoms by the U.S. government
Inmarsat is investing in a new satellite network, called
Global Xpress, that will provide a step up in capacity and
communications speeds next year.
But the timing of launch of the first satellite has been
thrown into doubt by the failure last month - the third in 12
months - of the Russian Proton-M launch rocket.
"We continue to have confidence (in Proton)," Pearce said.
"We are looking at other options should this pattern continue,
but at the moment we retain confidence in Proton.
"We still expect the first launch this year, possibly a
modest delay of up to a couple of months, but we still expect
global service by the end of 2014."
On Thursday, Inmarsat agreed a deal with RigNet, a
U.S. company that provides communications to the energy sector,
to buy capacity on its Global Xpress and L-Band services.