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Why the Speedcast share price dived today

The Speedcast International Ltd (ASX: SDA) share price fell 5.8% to $2.76 today and is now down 8% since the satellite communications business warned investors on Chistmas Eve that FY 2019 was not tracking to forecast.

Speedcast reports on a calendar year basis and now expects full year EBITDA to come in between US$130 million to US$135 million, compared to prior guidance for EBITDA between US$130 million to US$135 million. The smallish downgrade to forecasts was blamed on a “Carnival renewal’ contract taking longer than expected to finalise, with other new projects taking slower than expected to implement and its energy division below expectations.

The group has a market value around $706 million and posted an adjusted net profit of US$21 million for the six months ending June 30 2018 on revenue of US$304.9 million. It’s due to hand in its full year results this February.

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Motley Fool contributor Tom Richardson has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.