Telesat (NASDAQ:TSAT) Posts Quarterly Earnings Results, Beats Expectations By $1.69 EPS

Key Points

• Telesat reported quarterly EPS of $1.00, beating the consensus estimate of a $0.69 loss by $1.69, though the company continued to post a negative net margin and return on equity.
• Lightspeed demand remains strong, supported by a CAD 2.7 billion Canadian defense agreement and roughly CAD 5.6 billion in backlog. However, global service launch was delayed about three months to the end of Q2 2028, while milestone payments and financing continue to support liquidity.
• Legacy GEO operations remain under pressure from contract losses, weaker broadband demand and satellite retirements, with further revenue declines expected in 2027. Telesat also faces upcoming GEO debt maturities and its shares fell 6.7%, while analysts maintain a consensus “Hold” rating.

Telesat (NASDAQ:TSAT - Get Free Report) released its quarterly earnings data on Thursday. The company reported $1.00 earnings per share (EPS) for the quarter, topping the consensus estimate of ($0.69) by $1.69, Zacks reports. Telesat had a negative net margin of 102.62% and a negative return on equity of 15.53%.

Here are the key takeaways from Telesat's conference call:

• Lightspeed secured significant demand and backlog. Telesat highlighted the CAD 2.7 billion Canadian defense agreement, approximately CAD 5.6 billion of LEO backlog, and additional potential sovereign contracts expected mainly in 2027.
• Global Lightspeed service was delayed by roughly three months to the end of Q2 2028, reflecting the timing of the initial satellite launch and validation process. Telesat still expects to begin higher-latitude commercial services, including Canadian Arctic defense connectivity, by the end of Q1 2028.
• Liquidity was supported by approximately CAD 510 million in ESCP-P milestone payments during the quarter, with roughly CAD 1.5 billion of additional milestones due and CAD 1.5 billion available under Lightspeed financing.
• GEO revenue and EBITDA continued to decline because of broadcast contract losses, reduced broadband demand, and satellite retirements. Management expects further GEO revenue declines in 2027, including pressure from the renewal of Bell’s Nimiq 6 contract.
• Refinancing GEO debt remains a key priority as maturities begin later this year, but management provided no details on the path forward and said it was premature to speculate about alternatives such as equity issuance.

Telesat Stock Down 6.7%

TSAT traded down $3.03 during trading hours on Thursday, reaching $42.52. 194,629 shares of the stock traded hands, compared to its average volume of 209,901. Telesat has a fifty-two week low of $23.01 and a fifty-two week high of $61.54. The company has a market cap of $647.11 million, a price-to-earnings ratio of -2.38 and a beta of 2.11. The company has a debt-to-equity ratio of 0.90, a current ratio of 0.17 and a quick ratio of 0.17. The firm's fifty day simple moving average is $45.78 and its two-hundred day simple moving average is $42.57.

Analysts Set New Price Targets

Several analysts recently issued reports on the company. Zacks Research upgraded Telesat from a "strong sell" rating to a "hold" rating in a report on Monday, October 19th. Stifel Nicolaus began coverage on Telesat in a research report on Thursday, July 16th. They issued a "buy" rating on the stock. Scotiabank started coverage on Telesat in a research note on Monday, July 13th. They set a "hold" rating on the stock. Royal Bank Of Canada assumed coverage on Telesat in a research report on Thursday, August 27th. They issued a "moderate buy" rating for the company. Finally, Canadian Imperial Bank of Commerce began coverage on Telesat in a research note on Sunday. They issued a "sector outperform" rating for the company. Three equities research analysts have rated the stock with a Buy rating, three have issued a Hold rating and two have assigned a Sell rating to the company. Based on data from MarketBeat.com, Telesat currently has a consensus rating of "Hold" and an average price target of $33.50.

About Telesat

Telesat is a Canadian satellite communications operator that provides connectivity and related services to telecommunications companies, broadcasters, governments, enterprises and other organizations worldwide. The company operates a fleet of geostationary satellites and delivers satellite capacity for broadband communications, video distribution, enterprise networking, mobility and government applications.

In addition to its geostationary satellite services, Telesat is developing Telesat Lightspeed, a planned low Earth orbit satellite network designed to provide high-speed, low-latency broadband connectivity.

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