Inmarsat endures drop in revenues and profit but it is still a ‘buy’

Otmane El Rhazi from Mindful Money » Shares.

As Inmarsat updates the market Helal Miah, investment research analyst at The Share Centre, explains what they mean for investors…

On Thursday Inmarsat, the global satellite and communications group, reported a 5.5% fall in half year revenues with profit after tax falling by 4%. The group saw strong growth in the aviation business, along with stable sales to the US government. Sales to non-US governments were contrastingly weak due to lower operational activities.

Investors should know that, whilst these results seem poor, the group is close to finalising several major contracts with airlines for in-flight connectivity. Inmarsat has also announced a delayed satellite launch is now scheduled for late August, and this should enable their new GX services to be available worldwide by year end.

We believe that Inmarsat will play a major role and benefit from increased demand for communication services by the transport, freight and defence sectors. We continue with our medium risk ‘buy’ recommendation for investors looking for a mixture of capital growth and income.