Today I will examine Intelsat SA.’s (NYSE:I) latest earnings update (31 December 2017) and compare these figures against its performance over the past couple of years, in addition to how the rest of I’s industry performed. As a long-term investor, I find it useful to analyze the company’s trend over time in order to estimate whether or not the company is able to meet its goals, and eventually grow sustainably over time. View our latest analysis for Intelsat
How Well Did I Perform?
To account for any quarterly or half-yearly updates, I use the ‘latest twelve-month’ data, which either annualizes the most recent 6-month earnings update, or in some cases, the most recent annual report is already the latest available financial data. This technique allows me to assess many different companies on a more comparable basis, using the most relevant data points. For Intelsat, its latest earnings (trailing twelve month) is -US$178.73M, which, relative to last year’s level, has turned from positive to negative. Since these values are relatively short-term thinking, I’ve computed an annualized five-year figure for I’s net income, which stands at -US$542.86M. This shows that, though net income is negative, it has become less negative over the years.We can further assess Intelsat’s loss by looking at what the industry has been experiencing over the past few years. Each year, for the last five years Intelsat has seen an annual decline in revenue of -3.81%, on average. This adverse movement is a driver of the company’s inability to reach breakeven. Has the entire industry experienced this headwind? Scanning growth from a sector-level, the US telecom industry has been growing, albeit, at a subdued single-digit rate of 7.44% over the prior twelve months, and 3.83% over the past half a decade. This means that any tailwind the industry is benefiting from, Intelsat has not been able to realize the gains unlike its industry peers.
What does this mean?
Intelsat’s track record can be a valuable insight into its earnings performance, but it certainly doesn’t tell the whole story. Companies that incur net loss is always hard to forecast what will happen in the future and when. The most valuable step is to examine company-specific issues Intelsat may be facing and whether management guidance has regularly been met in the past. You should continue to research Intelsat to get a more holistic view of the stock by looking at:
- Future Outlook: What are well-informed industry analysts predicting for I’s future growth? Take a look at our free research report of analyst consensus for I’s outlook.
- Financial Health: Is I’s operations financially sustainable? Balance sheets can be hard to analyze, which is why we’ve done it for you. Check out our financial health checks here.
- Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.