British satellite company Inmarsat reported a 5 per cent increase in third quarter revenues on Thursday morning, avoiding some of the difficulties that have affected many of its rivals in recent months.
The stock had been weak in the run up to the results after a number of its European peers reported disappointing results. Yet a 50 per cent rise in revenue from its aviation unit, which transmits broadband into aeroplanes, helped Inmarsat to buck the trend with revenue rising by $16m to $358m.
Earnings before interest, taxation, depreciation and amortisation dropped 7 per cent to $191m and the company narrowed its expectations for full-year profit to a range of between $1.23bn and $1.28bn, from $1.2bn to $1.3bn.
The mixed results made for a volatile morning for Inmarsat’s shares, which rose as much as 6 per cent in early trade before falling back to a six per cent decline. Shares were down 3.8 per cent by mid-morning.
Rupert Pearce, Inmarsat chief executive, said the profit decline reflected its investment in new growth opportunities including Aviation. He said:
We have continued to invest in this significant opportunity, and in our core operational capabilities, albeit at the expense of lower EBITDA margins, to ensure that we remain uniquely positioned as the leading operator in global mobility markets. Consequently, whilst our markets remain challenging and the outlook continues to be difficult to predict, I remain confident about the medium to long term prospects for Inmarsat.
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