Telesat (NASDAQ:TSAT) Releases Earnings Results, Misses Expectations By $1.54 EPS

Key Points

• Telesat reported Q1 EPS of ($2.21), missing consensus by $1.54, and posted a consolidated net loss of about CAD 151 million driven largely by non‑cash goodwill impairments and a weaker GEO segment.
• The company says its LightSpeed LEO program is progressing toward full global commercial service around the end of Q1 2028, invested CAD 170 million in Q1 and expects full‑year LightSpeed spend of CAD 1.0–1.2 billion with financing and backlog it believes are sufficient to reach commercial service.
• Telesat is negotiating with the Government of Canada on the ESCAPE Arctic Ka‑band program, which management says could be material to forecasts but is not finalized and carries no assurance of completion.

Telesat (NASDAQ:TSAT - Get Free Report) announced its quarterly earnings data on Tuesday. The company reported ($2.21) earnings per share (EPS) for the quarter, missing analysts' consensus estimates of ($0.67) by ($1.54), Zacks reports. Telesat had a negative return on equity of 1.10% and a negative net margin of 37.25%.

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

• Telesat reports continued progress on the LightSpeed program — satellite development, user terminals, and ground-station deployment are moving ahead and the company expects to begin full global commercial service around the end of Q1 2028.
• Telesat is negotiating contractual arrangements with the Government of Canada for the ESCAPE program (military Ka‑band in the Arctic); management says the deal could be material and will update financial projections if and when arrangements are finalized, but there is no assurance yet.
• The GEO segment saw a year‑over‑year revenue decline (Q1 GEO revenue of CAD 86 million, down ~26%) and adjusted EBITDA fell to CAD 55 million (down ~37%), contributing to a consolidated net loss of CAD 151 million driven largely by non‑cash goodwill impairments and lower GEO EBITDA.
• Telesat invested CAD 170 million in LightSpeed in Q1 and expects full‑year LightSpeed investment of CAD 1.0–1.2 billion; management says ~CAD 300 million in LEO cash plus CAD 1.72 billion available financing and $325 million in vendor financing should be sufficient to fund the project to commercial service, with a LightSpeed backlog of about CAD 1.1 billion (pre‑Northwestel).

Telesat Price Performance

NASDAQ TSAT traded down $0.38 on Tuesday, reaching $48.25. The company had a trading volume of 130,091 shares, compared to its average volume of 187,044. The company has a quick ratio of 0.25, a current ratio of 0.25 and a debt-to-equity ratio of 0.66. The stock has a market capitalization of $715.96 million, a PE ratio of -6.40 and a beta of 2.02. The firm's 50 day moving average price is $39.87 and its 200 day moving average price is $32.82. Telesat has a 12 month low of $14.77 and a 12 month high of $55.69.

Institutional Trading of Telesat

Institutional investors and hedge funds have recently bought and sold shares of the stock. Royal Bank of Canada increased its holdings in Telesat by 32.2% in the 4th quarter. Royal Bank of Canada now owns 2,922 shares of the company's stock valued at $85,000 after acquiring an additional 712 shares during the last quarter. BNP Paribas Financial Markets increased its holdings in Telesat by 1,335.3% in the 3rd quarter. BNP Paribas Financial Markets now owns 3,818 shares of the company's stock valued at $101,000 after acquiring an additional 3,552 shares during the last quarter. Acadian Asset Management LLC increased its holdings in Telesat by 63.3% in the 1st quarter. Acadian Asset Management LLC now owns 6,381 shares of the company's stock valued at $119,000 after acquiring an additional 2,473 shares during the last quarter. Virtu Financial LLC bought a new stake in Telesat in the 4th quarter valued at $211,000. Finally, Quarry LP bought a new stake in Telesat in the 3rd quarter valued at $212,000.

Wall Street Analysts Forecast Growth

A number of analysts have recently issued reports on the stock. Weiss Ratings reissued a "sell (d+)" rating on shares of Telesat in a research note on Wednesday, January 21st. Deutsche Bank Aktiengesellschaft increased their price objective on shares of Telesat from $19.00 to $37.00 and gave the stock a "hold" rating in a research note on Thursday, March 19th. Finally, Wall Street Zen cut shares of Telesat from a "sell" rating to a "strong sell" rating in a research note on Saturday, April 25th. One analyst has rated the stock with a Hold rating and one has issued a Sell rating to the stock. According to MarketBeat.com, the company presently has a consensus rating of "Reduce" and a consensus price target of $37.00.

Telesat Company Profile

Telesat is a leading global satellite operator that designs, builds and delivers high-performance satellite communications solutions across multiple markets. The company operates a fleet of geostationary satellites to provide video distribution, data networking and managed broadband services to media companies, network operators, governments and enterprise customers. Telesat's infrastructure supports television distribution, cellular backhaul, rural broadband and corporate network applications.

In addition to its geostationary offerings, Telesat is developing a low Earth orbit (LEO) satellite constellation known as Lightspeed.

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