[Satellite TODAY 08-11-10] ViaSat made strategic gains in its 2011 first quarter with its Blue Force Tracking 2 contract win and the ViaSat-1 program, but government cost overruns and program delays caused the company’s quarterly results to fall short of analysts’ expectations, ViaSat announced in its financial reports, issued Aug. 10.
    Viasat revenues rose 21 percent over its second quarter 2009 results to $192 million, however, the company was expected to report revenues of $210 million.
    ViaSat Chairman and CEO Mark Dankberg said program expenses and delays in contract award decisions on a number of government follow-on and competitive contracts impacted the company’s growth during the quarter. “We anticipate that several potentially significant awards will be decided within the current quarter. The defense budget is clearly under increasing pressure, leading to ordering delays throughout the defense procurement market, but we believe that pressure also creates a more receptive market for ViaSat’s lower cost systems.”
    ViaSat’s government systems segment recorded second-quarter revenues of $88.8 million, a 4 percent decrease over the first quarter of fiscal year 2010 primarily related to lower sales of information assurance and tactical data link products, offset by higher sales of government satellite communication systems.
     “Results are likely to remain choppy for the next several quarters due to government budget deliberations and low-margin commercial shipments, but management is maintaining its full-year forecast,” Raymond James analyst Chris Quilty said in a report.
    ViaSat also said it determined in June that significant additional rework was required in order to complete a government satellite communication program. “Following the testing and subsequent internal reviews and analyses, we recorded an additional forward loss of $8.5 million in the first quarter of fiscal year 2011 for estimated additional labor and materials required to complete the program,” said Dankberg.
    ViaSat’s networks segment revenues were $45.6 million for the first quarter — a 28 percent decrease from the first quarter of 2010 — due to a reduction in sales of enterprise VSAT products and consumer broadband products. ViaSat no longer recognizes revenue for equipment sales to WildBlue following its acquisition of the satellite Internet provider in December. ViaSat said these losses were offset by increased revenue from its antenna systems product group. The WildBlue acquisition drove a $55 million revenue increase in ViaSat’s satellite services segment to $57.5 million. New contract awards in ViaSat satellite services segment totaled $55.8 million in the first quarter.