The American company enabling satellite communications, Globalstar Inc. trades its stock on the Global Select Market NASDAQ with the symbol of gsat stock. The company as founded as Globalstar LP on March 24, 1991, restructured as an LLC in 2003 and presently incorporated into Globalstar, Inc. since 2006.
Results of the First Quarter of 2020
The Louisiana based company announced the results of its first quarter ended March 31, 2020on May 8, 2020 quite optimistically. The Executive Chairman of Globalstar, Jay Monroe, encouragingly stated that the productivity of his organization has been chiefly sustained. When most of the businesses around the world have been falling apart due to the coronavirus pandemic, Globalstar has added 5G status at 3GPP to Band 53. This variant by Globalstar is called n53.
Globalstar’s Financial Review For The First Quarter
The revenue as compared with that in the first quarter of 2019 has gone up by 7%. This could be mainly attributed to revenue from engineering services relating to a study of feasibility. This comparison between the two consequent quarters shows signs of long-term stabilization for the subscribers.
Additionally, operating loss fell from $18.3 million for the first quarter of the previous year to $14.1 million during the first quarter of this year. Predominantly, the fall in operating expenses was due to cutting of cost of services of about $1.1 million and an overall reduction of $0.5 in marketing, general and administrative expenses, as well as the costs of equipment sales for subscribers.
However, the net income of $64 million in January-March 2019 has been replaced by a net loss in 2020. The balances of cash and equivalents stand at $10.5 million as of March 31, 2020.
How to see the recent growth in share prices?
The share prices of gsat stock had gone up by 14% in the last week of April 2020. This is undoubtedly a delight to the shareholders overall. But consider the case of long-term shareholders, who had been holding the shares that have seen a downfall of 86% over the last five years. Therefore this growth in the share prices of gsat stock doesn’t bring a substantial boost for these shareholders.
Though the company has been profitable in the past five years, its decreasing share prices are a surprise call for a detailed analysis. Metrics like revenue and earnings may give a clearer picture.
Compared with the last year, the shares of Globalstar have declined 37% in the past year. The market on the broad is on the downslide by 1.5%. The reason for this effect on share prices could be possibly the consequence of broader market ups and downs. Overall, the prolonged weakness of gsat stock does not signify anything good. However, a section of investors may go for contrary research wishing for some turnaround.