Equipment manufacturer Gilat Satellite Networks (NASDAQ: GILT/TASE:GILT) saw second-quarter GAAP net income of $500,000, compared with a loss of $200,000 a year ago.
WHY IT MATTERS: The company’s improved results reflect a recovery in its aviation and maritime businesses. Gilat recently announced a broadened in-flight connectivity (IFC) partnership with Intelsat.
“On the maritime front, we are working hand-in-hand with SES (EPA:SESG) to introduce premium maritime service to cruise lines, and we expect the first ship to go online this quarter,” Chief Executive Adi Sfadia said during Gilat’s Q2 earnings call Tuesday.
BY THE NUMBERS: The company is on track for a 2022 GAAP operating profit of $5 million to $9 million, up from $2.2 million in 2021, according to its earnings presentation. Highlights from Q2 include:
- GAAP gross margin of 36%, up from 30% in Q2 2021;
- Balance sheet with $71 million in cash and cash equivalent with no debt; and
- $8 million follow-on order from an unnamed low Earth orbit (LEO) constellation.
STATE OF PLAY: Gilat’s investments in R&D resulted in an 8% year-over-year uptick in operating expenses for Q2 at $18.3 million, Gil Benyamini, chief financial officer, said on the call.
NOTEWORTHY: Development of the company’s electronically steered antenna is “continuing to progress, but not as we wanted,” Sfadia said, because “right now, there is no customer who is willing to … support finishing the design. In the end, you can develop those kinds of antennas up until a specific point where you need a customer to make sure that it fits the exact trade and the exact aircraft.”
Regarding the Eutelsat (EPA:ETL)-OneWeb merger, Sfadia said, “We have a good relationship with Eutelsat and we hope that the merger can open opportunities for us also with OneWeb base.”
MARKET REACTION: Shares of Gilat were trading at $7.14 as of 3:20 p.m. today, up 3.3% from market open.
THE BOTTOM LINE: The company is projecting 2022 revenues of $245 million to $265 million “even as we consider challenges such as the supply chain turmoil and our continued strong investment in R&D,” Sfadia said.
