Gilat Satellite Networks Ltd. (Nasdaq: GILT; TASE: GILT) swung to losses on sharply lower revenue, missing analysts' forecasts, and has taken cost-cutting measures, including layoffs to deal with the shortfall in income.
Revenue fell to $71.3 million for the third quarter from $89 million for corresponding quarter of 2012. GAAP-based net loss was $4 million ($0.10 per share) for the third quarter, compared with a GAAP-based net profit of $3.3 million for the corresponding quarter, and non-GAAP net loss was $1.9 million ($0.04 per share), compared with a non-GAAP net profit of $5.8 million. The analysts' consensus was zero earnings per share on $84.2 million revenue.
"The shortfall in the third quarter was mainly attributed to two deals which were delayed in our Commercial Division, reduced revenue from Compartel in Colombia, and a delayed project implementation in our Services Division," said Gilat CEO Erez Antebi.
The closing of the sale of its Tulsa, Oklahoma, subsidiary Spacenet Inc. to SageNet LLC has been delayed, due to assertions by the buyer, and despite obtaining Federal Communications Commission (FCC) approval. "While the Company rejects all of SageNet's assertions and believes them to be unfounded, it is in continuing discussions with SageNet concerning their assertions," said Gilat.
On the expenses side, Antebi said, "We have taken immediate action to cut costs reducing our global headcount and fixed expenses by approximately $9 million annually. We expect to see most of the impact of the reductions beginning in the first quarter of 2014. It is important to note that we have taken care not to reduce our sales teams or our R&D investments in our strategic growth areas.
"Going forward, we believe we are well positioned for success," concluded Antebi. "While this has been a difficult quarter, we have taken the appropriate measures to significantly cut costs and further streamline the company. We continue to close deals in our Commercial Division with new and existing customers. Our Defense Division is stable and we see growing interest and need for our products."
Gilat's share price fell 9.9% on Nasdaq yesterday, following the publication of the financial report, to $4.70, giving a market cap of $197 million. The share price fell 1.3% in morning trading on the TASE, before trading in the share was suspended. Trading will resume at 2:30 pm.
Published by Globes [online], Israel business news - www.globes-online.com - on November 14, 2013
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