Shares in satellite group Inmarsat reached for skies today after revealing better than expected third quarter results.
The group's aviation division grew revenues by 10 per cent to $36m (£29m) having been boosted by mopping up contracts with some of Europe's largest airlines. These included an agreement with British Airways to provide wifi on its short haul services, a deal that the airline announced on Wednesday.
"Basically we now have the top three European airline fleets in the bag, which is a wonderful position to be in, with DLH [Lufthansa], this third airline and IAG [British Airways]," Inmarsat chief executive Rupert Pearce told Reuters.
3 November 2016 @ 1:15pmInmarsat (ISAT)
Government revenues also hiked by 9.8 per cent to $85m thanks to its "take or pay" contract with Boeing, understood by analysts to be worth around $200m over the next 4-5 years.
However maritime revenues, the group's largest division by sales, fell by 4.9 per cent to $143m. "Maritime overall is moving sideways," summarised Pearce.
Inmarsat left all guidance on financial performance untouched with one exception. Capital expenditure for 2016 was adjusted to between $400m-$500m, down around $100m on previous guidance.
This was due to the group having to delay the launch of its fourth satellite following the explosion on the SpaceX platform, which Inmarsat was scheduled use in its next launch.
Inmarsat's shares unaffected by SpaceX explosion?
Analysts were somewhat subdued in the wake of today's share price hike, although Citibank confirmed to Reuters that the results were ahead of the consensus expectations.
John Karidis of Haitong Research was not entirely convinced. "We believe the rather exuberant share price reaction so far today is mainly due to relief that Inmarsat results did not miss expectations," he said.
In addition, operating costs in the group's best performing aviation division grew by 150 per cent, meaning that earnings were actually 12.9 per cent lower.
"Inmarsat is adding ‘Aviation’ fixed costs faster than the CFO guided less than a month ago," warned Karidis.