Viasat, Inc. VSAT is scheduled to report third-quarter fiscal 2025 results on Feb. 6, after the closing bell. The company missed earnings estimates in three of the trailing four quarters and surpassed once.

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Despite healthy demand in the Defense and Advanced Technologies segment, Viasat’s revenue is expected to remain flat year over year in the third quarter of fiscal 2025, owing to weakness in the Communication Services segment.

Factors at Play

During the quarter, Viasat completed the divestiture of its Energy Services System Integration business to a U.S.-based private investment firm, MAG Capital Partners. This strategic restructuring underscores Viasat’s commitment to sharpen its focus on creating innovative global communication solutions that serve diverse sectors, including communication, defense and governments worldwide. The transaction is expected to have bolstered Viasat’s diverse portfolio of markets and products and provide greater resilience to the company’s overall financial performance by focusing on core business growth in the to-be-reported quarter. 

In the December quarter, the U.S. General Services Administration awarded Viasat a five-year Indefinite Delivery/Indefinite Quantity contract. Per the $568 million deal, Viasat introduced an array of cutting-edge technologies and solutions, including advanced networking systems, airborne satellite communication terminals, beyond-line-of-sight satellite services and robust cybersecurity and encryption capabilities to the U.S. Department of Defense. All these developments are likely to have supported the company’s top-line growth in the to-be-reported quarter.  

In the quarter under review, Viasat completed the first trial of direct-to-device satellite connectivity in India in collaboration with BSNL, a prominent telecommunication company in the country. This development is likely to have strengthened Viasat’s foothold in the region and enhanced its commercial prospects in the to-be-reported quarter. 

However, Viasat operates in a dynamic and competitive market that includes stalwarts from various industries. In the Communication Services segment, it faces stiff competition from companies like AT&T, Comtech and DISH Network. On the other hand, the Defense and Advanced Technologies segment faces threats from manufacturers of defense electronics products and systems, such as General Dynamics, which significantly impacts the company’s business. Macroeconomic uncertainties in the international markets are worrisome.

Overall Expectations

The Zacks Consensus Estimate for Product revenues is pegged at $321.31 million, implying an improvement from $303.1 million reported in the fiscal third quarter of 2024. For the Service vertical, the Zacks Consensus Estimate stands at $807.43 million, suggesting a decrease from $825.5 million year over year. 

For the December quarter, the Zacks Consensus Estimate for total revenues is pegged at $1.13 billion, which is in line with the year-ago quarter’s reported figure. The consensus estimate for adjusted earnings per share is pegged at a loss of 53 cents, indicating a narrower loss from 99 cents reported in the prior-year quarter.

Earnings Whispers

Our proven model does not conclusively predict an earnings beat for Viasat this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat, but this is not the case here.

Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, is 0.00%, with both pegged at a loss of 53 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Viasat Inc. Price and EPS Surprise

Viasat Inc. price-eps-surprise | Viasat Inc. Quote

Zacks Rank: Viasat currently has a Zacks Rank #3.

Stocks to Consider

Here are some companies you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this season:

The Earnings ESP for QUALCOMM Incorporated QCOM is +3.34% and sports a Zacks Rank of 1. The company is scheduled to report quarterly numbers on Feb. 5. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Earnings ESP for Zillow Group, Inc. ZG is +10.44% and carries a Zacks Rank of 2. The company is scheduled to report quarterly numbers on Feb. 11.
 
Twilio Inc. TWLO is set to release quarterly numbers on Feb. 13. It has an Earnings ESP of +3.28% and sports a Zacks Rank #1.  

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