Results I saw last results, pretty bad.
About the loss of 21,76$ per share, most of it is goodwill and was adjusted to reflect market value. A part of it was due to the loss of Worldview 4, which was known. The rest was for GEO division, who are doing bad.
Dividend reduced to 1¢ was no surprise. I thought they would cut it completely so... I consider that a good new, because debt reduction is essential.
They decided to keep their GEO segment because basically no one was ready to buy it for their asked price. They hope to break even in 2 years with GEO division. Apparently they only need 1 or 2 GEO satellte construction per year to stay afloat.
EBITDA was lower than I expected. The danger here is to breach debt covenant of 6.0x. Maybe their bond credit will take a hit ? I would not be surprised.
Management said Q1 would be the worse quarter of 2019, so stock will stay low for some time. They also did not provide estimate for 2019. What is known is that their CAPEX will be higher than 2018 and GEO will still lose money, but not as much as 2018. So probably negative FCF for 2019.
Management think that revenue for imagery segment will stay they same as 2018, which is a good new considering that they lost Worldview 4. They also said they would lower the debt over time.
They will also reduce 4% of their workforce. Management said they would save 60-70 millions per year, unfortunatly most of it is due to the dividend cut.
So what now ? Well they will not have to pay some of their debt until late 2020 so it give time for investors to wait for good news.
I don't think they will go bankrupt, and even if they would be on that path, I think a takeover would occur before that.
Maxar has value, their Digital Globe segment definitly worth something, Services doing Ok and SSL (excluding GEO) is fine too.
However I think this stock will stay depressed for some time and could go lower than what it is right now.
But when good news will appear and debt problem begin to resolve, we will see a multi bagger here.