Summary
- EchoStar announces its sixth consecutive earnings beat in the third quarter.
- The Hughes segment continues to drive sales forward with adjusted EBITDA increasing by 9% over a rolling quarter basis.
- The long-term technicals remain bullish. Balance sheet trends confirm the upward curve.
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We remain long EchoStar Corporation (NASDAQ:SATS) and were encouraged by recent trends in the third quarter earnings report. As mentioned in previous commentary, we believe there is a lot of validity to the recent MACD crossover on the monthly technical chart. This means that the expected provision of infrastructure, networks and bandwidth which is really what EchoStar needs to deliver has been digested by the market at this stage. The recent third quarter bottom line number of $0.38 per share was the sixth consecutive earnings beat by EchoStar. The Hughes segment continues to drive sales forward and management remains focused on investing behind its consumer business as well as bringing its JUPITER 3 satellite to market sometime next year.
We are fully aware though that management will have to put more capital to work to keep the market interested over the long term. This is where the financial condition of the company comes in and specifically the balance sheet. Although sales grew by almost 7% in the third quarter, management knows that elevated investment will be needed with respect to integrating satellites services into 5g networks as well as hybrid networks in both the narrowband and broadband space.
Therefore let’s go through EchoStar’s balance sheet to evaluate its financial condition. We will look at trends of some of the key line-items to see if the financials line up with what we are seeing in the technicals.
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