* Two GX satellite launches delayed by up to six months
* Reiterates 2014-2016 revenue growth target
* Shares down 2.2 percent
(Adds CEO comments, analyst reaction, shares)
By Paul Sandle
LONDON, Aug 5 British satellite company Inmarsat
said the global implementation of its new communications
network would be delayed by as much as six months as its Russian
launch provider Proton recovers from a failure.
Chief Executive Rupert Pearce said the delay came as no
surprise after the most recent failure of a Proton rocket, the
workhouse of the satellite industry, in May.
"The guesstimate at the moment given what we know, is that
we will have both birds up and be fully launched for a global
service by the end of the first half of next year," he said in
an interview on Tuesday.
"But despite that, having seen the resilience in our
business, we are reasserting our medium-term guidance of MSS
wholesale revenue growth of 8-12 percent over the 2014-16
Pearce said the prevailing sanctions against Russia over the
political situation in Ukraine were not a barrier to the launch.
The company, which provides communications for ships,
aircraft and users in remote locations, had expected the two
remaining satellites for its new network to be in orbit by the
end of this year.
Pearce said the potential for the network was shown by
interest from customers such as the U.S. government, even on the
regional basis that can be provided by the satellite already in
"It signals the confidence we have in Global Xpress (GX)
that our important customer, the U.S. government, will be
buyers," he said.
Shares in Inmarsat were down 2.2 percent at 705.5 pence at
0939 GMT, after earlier touching a two-month low of 699.5 pence.
Analysts at Jefferies said they were cautious coming into
the quarter, given the protracted return to flight of Proton.
They said the delay would cut their forecast for full-year
revenue growth by $30 million to $40 million.
"While we now see FY15 revenue coming down (no changes to
FY16 onwards), this type of delay does not in the least derail
the fundamentals of the GX proposition in our view," they said.
Inmarsat posted adjusted core earnings of $159.9 million for
its main business in the second quarter, broadly in line with an
average of $160.8 million expected by analysts.
Revenue of $196.1 million was up 1.9 percent.
(Editing by Jason Neely)