Shares of Viasat (NASDAQ: VSAT) fell 14.6% through 11:10 a.m. ET this morning despite beating forecasts in its fiscal fourth-quarter 2024 earnings report.
Heading into earnings, analysts were feeling pretty pessimistic about Viasat, forecasting that the satellite communications company would lose $0.63 per share on just under $1.1 billion in quarterly sales. But it surprised to the upside last night, losing only $0.24 per share, and scoring sales of about $1.15 billion.
Viasat earnings
That's the good news. Now here's the bad: $0.24 per share was only Viasat's loss when adjusted for one-time items. Its loss when calculated according to generally accepted accounting principles (GAAP) was much steeper -- $0.80 per share -- and quite a comedown from the $15.54 per share in profit reported a year ago. The loss was despite revenue growing 73% thanks to the acquisition of Inmarsat.
On the plus side, earnings for all of fiscal 2024 (just concluded) came to $1.25 per share, which was better than the fiscal 2023 loss of $0.01 per share.
Is Viasat stock a buy or a sell?
What might stand out most in this report is the extremely volatile nature of this space stock's earnings, which surged for the full fiscal year but plunged in the final quarter. With the company's absorption of Inmarsat nearly one year in the rearview mirror, things should settle down a bit, such that investors can get a better handle on how things are going.
Management predicts fiscal 2025 (the current year) will see the start of a multiyear transition. But that's not necessarily good news in the short to medium term. For example, it says revenue will be basically flat this year, and free cash flow probably negative. The company doesn't expect to resume growing until fiscal 2026, or to generate free cash flow until the first quarter of fiscal 2026.
Investors can probably assume Viasat stock won't perform very well until fiscal 2026, either.
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Rich Smith has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
