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Speedcast shares sunk by profit downgrade

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The Speedcast International Ltd (ASX: SDA) share price could tumble today after the satellite communications business told investors it now expects adjusted calendar year 2019 EBITDA in the region of US$140 million to US$150 million, compared to prior guidance between $160 million to $171 million. 

The company also warned it expects first half 2019 adjusted EBITDA to hit between US$60 million to US$64 million, which means it will need to deliver a far stronger second half to the year to even meet its downgraded guidance. 

The company blamed the result on “evolving market conditions” and more “recent commercial developments”. Specifically it blamed delays in NBN revenues, weak market conditions in enterprise and emerging markets (EEM), and “technical difficulties causing further delays in the ramp up of the Carnival contract”.

Speedcast joins a group of tech oriented companies in the naughty corner after delivering earnings downgrades this week, with others including dark fibre business Superloop Ltd (ASX: SLC) and software business Adacel Technologies Ltd (ASX: ADA).

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Tom Richardson has no position in any of the stocks mentioned.

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