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Maxar's (MAXR) Q3 Earnings Beat Estimates, Revenues Miss

Zacks Equity Research
·4-min read

Maxar Technologies Inc. MAXR reported mixed third-quarter 2021 results, wherein the bottom line beat the Zacks Consensus Estimate but the top line missed the same.

The Westminster, CO-based company made progress on its growth plans, with solid bookings in both the Earth Intelligence and Space Infrastructure segments. Notable awards included the 11th renewal of the EnhancedView program, another renewal of the Global Enhanced GEOINT Delivery program, and an award to continue the development and operations of a classified big data analytics program.

Maxar also inked a deal with a fifth U.S. ally to upgrade the country’s ground infrastructure to be Legion ready and it was awarded contracts to build two new Geosynchronous Equatorial Orbit satellites for Sirius XM SIRI. Maxar advanced the Legion construction program and expects to launch the first two satellites between March and June 2022.

Net Income

Net income from continuing operations was $14 million or 19 cents per share compared with $84 million or $1.32 per share in the prior-year quarter. Despite an increase in operating income, net income declined mainly due to lower other income and no income tax benefit. The bottom line beat the Zacks Consensus Estimate by 4 cents, delivering a surprise of 26.7%.

Maxar Technologies Inc. Price, Consensus and EPS Surprise

Maxar Technologies Inc. price-consensus-eps-surprise-chart | Maxar Technologies Inc. Quote

Revenues

Quarterly total revenues remained stable year over year at $437 million. The Earth Intelligence segment’s revenues were inclusive of a $20 million decrease in the recognition of deferred revenues related to the EnhancedView contract. While Product revenues increased to $166 million from $161 million year over year, Service revenues decreased to $271 million from $275 million. The top line missed the consensus estimate of $453 million.

Segment-wise, revenues from Earth Intelligence declined 1.1% year over year to $271 million. The decrease was primarily due to a $20 million fall in the recognition of deferred revenues related to the EnhancedView contract and a $6 million decline in revenues from the U.S. government. The segment’s adjusted EBITDA declined to $124 million from $128 million a year ago.

Revenues from Space Infrastructure declined 0.6% year over year to $180 million due to a $16 million decrease in revenues from U.S. government contracts. Adjusted EBITDA increased to $14 million from $12 million.

Other Details

Operating income increased to $37 million from $7 million in the prior-year quarter. Total adjusted EBITDA was $113 million compared with $112 million a year ago, with respective margins of 25.9% and 25.7%.

Maxar generated solid cash flow in the quarter and good year-over-year revenue and adjusted EBITDA growth, considering deferred revenues included in last year’s results. The performance in Earth Intelligence was driven by growth in commercial and international defense and intelligence customers. Space Infrastructure benefited from commercial awards offset by the timing of work on certain government programs. Maxar has raised the full-year guidance for adjusted EBITDA and cash flow.

Cash Flow & Liquidity

During the first nine months of 2021, Maxar generated $185 million of cash from operating activities compared with $132 million in the prior-year period.

As of Sep 30, 2021, the company had $36 million in cash and cash equivalents with $2,064 million of long-term debt.

Zacks Rank & Stocks to Consider

Maxar currently carries a Zacks Rank #3 (Hold).

A couple of better-ranked stocks in the industry are The Liberty SiriusXM Group LSXMK, sporting a Zacks Rank #1 (Strong Buy) and Globalstar, Inc. GSAT, carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Liberty SiriusXM delivered a trailing four-quarter earnings surprise of 13.5%, on average.

Globalstar pulled off a trailing four-quarter earnings surprise of 25%, on average.


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