Globalstar, Inc. (NYSEMKT:GSAT) released its third quarter earnings report after closing bell tonight, posting net income of $129.4 million, compared to net losses of $205 million last year.
Key metrics in Globalstar’s earnings report
Adjusted EBITDA was $4.8 billion for the quarter, a 92% year over year increase. Globalstar said the improvement was due to a $.9 million revenue increase and a $1.4 million decline in expenses.
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Service revenue rose 9% year over year to $18.5 million for the quarter. The company’s total subscriber base at the end of September increased 14% to almost 620,000. Globalstar added about 7,000 net Duplex subscribers in the last year, 15,000 net SPOT subscribers and 56,000 net Simplex subscribers.
Equipment sales revenue fell 10% year over year to $4.9 million for the quarter. The decline was due to higher sales of the company’s SPOT Global Phone in last year’s quarter.
“We nearly doubled Adjusted EBITDA and materially grew our subscriber base, exemplifying the benefits of the world’s most modern satellite network,” said Globalstar Chairman and CEO Jay Monroe in a statement. “Despite the recent unusual market activity in the Company’s stock, we remain focused on our core operations including an expanded footprint, upgrading the existing ground network and developing new products. We also remain focused on expeditiously completing the FCC TLPS approval process.”
Kerrisdale shorts Globalstar
The “unusual market activity” management referred to is in connection with Kerrisdale Capital’s publicly announced short thesis. Globalstar leapt into the news earlier this month when Kerrisdale published its thesis. Shares slumped after Kerrisdale published the letter it sent to the Federal Communications Commission. In the letter, the firm suggested that it be more effective to open Channels 12 and 13 to deal with the Wi-Fi congestion rather than through Globalstar’s experimental Terrestrial Low Power Service.
The firm said the concept is “technically and commercially defective and will do nothing to expand wireless broadband capacity.” On the other hand, Kerrisdale said easing restrictions on the 2.4 GHz band would free up another channel.