(Reuters) – Viasat forecast annual revenue below Wall Street estimates in anticipation of a slowdown in its satellite services business, sending its shares down more than 11% after the bell on Tuesday.
The company said it expects revenue from its satellite services to decline in low to mid-single digits as its U.S. fixed broadband business faces competition from wireless carriers such as T-Mobile US that offers cheaper plans.
As a result, Viasat has been shifting its focus from fixed broadband to mobility business that provides satellite-based connectivity solutions to governments across sectors.
The company, which counts the U.S. government as a customer, had acquired British rival Inmarsat in a $7.3 billion deal last year, as it looks to broaden its satellite and land-based communications services.
However, an uncertain economy and intense competition from rival satellite service providers such as Starlink have weighed on Viasat.
Viasat President Guru Gowrappan told Reuters in an interview that governments are wary of relying on any one particular partner to avoid dependency and they like options.
The company competes with Intelsat, L3Harris Technologies and EchoStar among others in its government systems segment.
Viasat’s quarterly government systems segment revenue rose 77% to $385.8 million from a year ago, while analysts were expecting $340 million.
It forecast revenue to be nearly flat for fiscal 2025 from a year earlier. Analysts were expecting a nearly 7% growth to $4.57 billion, according to LSEG data.
The satellite communications firm’s fourth-quarter revenue came in at $1.15 billion, narrowly beating expectations of $1.09 billion.
It posted per-share loss of 80 cents compared with profit per share of $15.56 a year ago. Its quarterly net loss from continuing operations rose to $90 million from $62 million a year ago due to higher interest expense tied to Inmarsat deal.
(Reporting by Jaspreet Singh in Bengaluru; Editing by Mohammed Safi Shamsi and Arun Koyyur)
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