Orbcomm flags revenue increase on takeovers, new product sales

Satellite operator and M2M specialist Orbcomm saw second-quarter revenues increase at a double-digit rate thanks to growing subscriber numbers and buoyed by takeover activity.

The operator’s sales rose by 13.7%, compared with the same period last year, to $18.6 million, with the acquisitions of GlobalTrak and MobileNet contributing $500,000 to overall revenues.

Nevertheless, rising costs associated with the takeovers plus investments in product development triggered a 10.4% fall in net income, to $1.67 million.

Satellite operator and M2M specialist Orbcomm saw second-quarter revenues increase at a double-digit rate thanks to growing subscriber numbers and buoyed by takeover activity.

The operator’s sales rose by 13.7%, compared with the same period last year, to $18.6 million, with the acquisitions of GlobalTrak and MobileNet contributing $500,000 to overall revenues.

Nevertheless, rising costs associated with the takeovers plus investments in product development triggered a 10.4% fall in net income, to $1.67 million.

Robert Costantini, Orbcomm’s (Rochelle Park, NJ, USA) chief financial officer, said the operator was continuing to incur costs as it pursued major revenue opportunities.

“We continue to focus on the growth and expansion of the company as a global end-to-end M2M solutions provider in new and existing markets, as evidenced by the recent launch of our new portfolio of state-of-the-art asset tracking and monitoring devices,” added Marc Eisenberg, Orbcomm’s chief executive.

Orbcomm said net subscriber additions were 23,000 in the second quarter, including a one-time increase of 2,000 subscribers from its takeovers, giving the operator some 800,000 subscribers in total, up from 715,000 at the end of June 2012.

The company’s headcount has also risen, from 164 employees at the start of the year to 188 at the end of June, as a result of the takeover activity, and Orbcomm expects to end the year with approximately 200 employees.

The quarter was marked, in particular, by Orbcomm’s launch of an “end-to-end” telematics solution for the heavy equipment industry, which takes advantage of its MobileNet acquisition plus partnerships with a number of large cellular operators –including AT&T (Dallas, TX, USA), Rogers (Toronto, Canada), T-Mobile (Bellevue, WA, USA) and Vodafone (Newbury, UK) – to provide a “dual-mode” service to customers.

In its results announcement, Orbcomm also gave news of a deal with a “major Korean OEM” – revealed to be Doosan Group (Seoul, South Korea) in the operator’s conference call with analysts – and said it would start the first phase of a global telematics deployment for the new customer between October and December this year.

Orbcomm said that acquisition activity in recent quarters had positioned the company to serve a variety of vertical markets with a complete M2M offering.