Thursday 05 May 2016 11:36 am

Inmarsat share price tumbles after profits plummet and revenue guidance revised down

Inmarsat reported that its profits had plummeted in its quarterly results today, and it wasn't much longer before its share price followed.

The satellite and communication services company revealed that its profits before tax had fallen to $58.5m (£40.3m) for the three months ended March 2016, compared with $96.3m the year before.

Shares in the FTSE 100 company were trading down 5.4 per cent at 879.5p at around 11am London time.

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Revenue for the three-month period also dipped to $298.6m, down two per cent on the prior year's $304.8m.

"Many of our markets face short-term headwinds which intensified in the first quarter, leading to a softer revenue performance than expected, although we remain highly competitive in each of our core markets, growing market share and diversifying the business to plan," said Rupert Pearce, Inmarsat's chief executive.

The company's enterprise division, which focuses on worldwide energy, industry and media services, performed particularly badly, with revenue dropping to $34m, down 12.6 per cent. However, Inmarsat's aviation division helped to offset some of the poor performance, with revenue rising to $31.2m, up 15.1 per cent.

Inmarsat has also revised its guidance for revenues for the year down by $50m to the $1.175bn to $1.25bn range.

Pearce continued: "While in the near term business growth will continue to be challenging in choppy markets, we remain very well positioned for future growth and diversification, and indeed I remain confident that the foundations that we are establishing will deliver the expected medium term growth."

Inmarsat is no stranger to a tumbling share price after revealing worse than expected results. In March, it announced that weak government spending had caused a dip in its profits and its share price closed down 4.2 per cent, dragging the FTSE 100 down significantly as well.