Globalstar, the Covington satellite telephone services provider, reported a first-quarter loss of $129.7 million, or 13 cents per diluted share, compared with a $250.5 million loss, or 29 cents per share, the year before.
The company’s adjusted earnings before interest, taxes, depreciation and amortization were $3.1 million for the quarter, compared with $3.8 million in the first quarter of 2014. Higher sales and marketing expenses aimed at raising the number of subscribers, such as increased dealer commissions, additional sales employees and rebate promotions, led to the change in EBITDA.
Company officials have said EBITDA is the measuring stick satellite phone companies use because they are severely affected by depreciation of their equipment.
The company said revenue for the first quarter rose to $21 million, compared with $20.5 million in the first quarter of 2014. At the same time, the number of total subscribers to Globalstar’s phone service rose by 12 percent. But the rising dollar hurt first-quarter numbers because converting foreign subsidiaries’ revenue at a lower exchange rate offset revenue growth, said Jay Monroe, Globalstar’s CEO.
“We continue to make disciplined investment decisions as we build and grow the company’s operations, including our expanded sales and marketing efforts, and we remain focused on the continued growth of our subscriber base to drive increased recurring revenue,” he said.
Globalstar’s results fell short of Wall Street expectations. Analysts surveyed by Thomson Reuters forecast a loss of 3 cents per share for the quarter, based on revenue of $23.1 million.
In March, Globalstar successfully completed a pilot test that was the final major hurdle toward getting the Federal Communications Commission to grant permission for it to open up its spectrum to allow for wireless Internet service in American cities. That’s a move that could lead to a billion-dollar windfall for the company.
“We are making significant progress in the spectrum proceeding and dispelling concerns of the opposition,” Monroe said. “We look forward to the completion of this process in the near term after the technical review process is completed.”
Globalstar stock was down 10 cents a share Thursday to close at $2.31.
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