ViaSat Scores Hat-Trick With Huge Q4 Earnings Beat

ViaSat Inc. (VSAT - Free Report) scored an impressive hat-trick of earnings beats, as its fourth-quarter fiscal 2017 results surpassed estimates by a colossal margin. The company’s adjusted earnings (including stock-based compensation adjustments) of 14 cents came in miles ahead of the Zacks Consensus Estimate of 1 penny.

Non-GAAP earnings rose 10.3%, compared with the year-ago quarter, to 32 cents. Robust top-line growth, led by record revenues in Satellite Services and Government Systems businesses, drove the earnings expansion.Also, a drastic fall in interest expense boosted earnings.

For fiscal 2017, non-GAAP earnings came in at $65.6 million, up 7.5% over the last fiscal.

Inside the Headlines

The company posted revenues of $416.4 million in the fiscal fourth quarter, which trumped the Zacks Consensus Estimate of $399 million. Revenues also rose 12% compared to the prior-year quarter tally. Robust growth in satellite services operations across the residential, aero and government mobility markets, and terrific growth in government business, supported the remarkable top-line performance.

For fiscal 2017, the top line came in at $1,559.3 million, up 10% over fiscal 2016. The company won record level of new contract awards ($1.7 billion), highlighting strong demand for both products and services.

Segment wise, Satellite Services revenues were up 10.6% year over year to $160.9 million, which was a record high for the segment. Impressive sales were driven by premium higher bandwidth broadband internet plans and growth in value-added service offerings. Particularly, growth of Average Revenue per User (ARPU) in ViaSat's residential broadband internet business proved to be a major profit churner for value-added services.

However, Commercial Networks revenues continued to display weakness, declining 5% on a year-over-year basis to $59.1 million. This segment continues to witness an increase in research and development investment (up 77% year over year) associated with internal development of the ViaSat-3 project and expansion of next-gen mobility solutions.

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