Intelsat lowers revenue guidance citing African oversupply

Intelsat has lowered its full year 2013 revenue guidance citing competitive pressures on network services in Africa and reduced US government spend on commercial satellite services.

Announcing its third quarter results, Intelsat said that the business environment in Africa is increasingly competitive and that oversupply from traditional satellite operators and fibre alternatives were slowing network services revenue growth.
Intelsat claimed that it now expects full-year 2013 revenue to be lower than the previously anticipated range of US$2.615 billion (€1.93 billion) to US$2.640 billion by roughly half a percent and said it expects these conditions to persist as it plans ahead for 2014.

“Despite the solid performance, we are managing through two trends affecting our revenue growth and our operating expense profile,” said Intelsat CEO Dave McGlade.

“These include revenue declines due to on-going effects of the US government reduced spending and budget sequestration.  It also includes the impact of fibre deployments and the oversupply environment in Africa, which affects our network services business.”

McGlade said that while these issues will continue to affect its near-term results, its long-term outlook “remains positive.”

Overall, in the quarter, Intelsat reported revenue of US$652 million, unchanged from Q3 2012. Net income was US$88.6 million, compared to a loss of US$35.3 million for the same period last year. Earnings before net interest, taxes and depreciation and amortisation (EBITDA) was US$493.6 million, an increase of US$22.6 million from US$471.0 million for Q3 2012.