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Iridium plummets on Q2 miss, guidance cuts

  • Iridium (IRDM -17.3%) now expects 10%-15% 2013 billable subscriber growth and 6%-8% service revenue growth, below prior forecasts of 15%-20% and 8%-10%.
  • The satellite services firm is also now guiding for 8%-10%/year service revenue growth in 2014 and 2015; prior guidance was for 9%-11% growth from 2013-2015. Moreover, its 2015 operational EBITDA margin target is now 55%-60% vs. a prior 60%.
  • Iridium says "product issues" in its maritime business "have led to higher churn and tempered [its] growth prospects," and that subscriber growth and usage in its core satellite phone ops is falling, partly due to "increased competition in the cost-sensitive segment" of the market.
  • Iridium ended Q2 with 647K billable subs, +26K Q/Q and +71K Y./Y.
  • Commercial revenue (60% of total) +8% Y/Y, government -7%, equipment sales -17%.
  • Commercial ARPU -2% Y/Y, government -3%.
  • Q2 results, PR

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