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In the communications sector, Telesat experienced a 10.3% increase in its share price, closing at $12.07 during the last trading session. This gain was marked by a higher-than-average trading volume and follows a notable 20.2% increase over the past four weeks.
Funding for Lightspeed LEO Satellite Constellation
The recent rise in Telesat’s stock price is linked to the announcement of a C$2.54 billion funding secured from the Canadian and Quebec governments. This funding is designated for advancing the Telesat Lightspeed Low Earth Orbit (LEO) broadband satellite constellation project. The investment will support the development of the Telesat Lightspeed network, which includes satellite infrastructure and global terrestrial landing stations.
The Telesat Lightspeed network (NASDAQ:TSAT) aims to enhance internet and 5G network coverage in Canada and address the digital divide within the country. The initiative is also expected to create high-quality jobs and contribute to the Canadian economy, with Telesat increasing its workforce by 33% over the past year.
Projected Capital Expenditures and Future Launches
For 2024, Telesat projects capital expenditures for the Lightspeed program to range between $1 billion and $1.4 billion. The company anticipates the first Telesat Lightspeed satellites will be launched around mid-2026.
The company is expected to report a quarterly loss of $0.16 per share in its upcoming earnings report, reflecting a year-over-year change of +95.8%. Revenue for the quarter is anticipated to be $104.19 million, representing a 20.2% decrease compared to the same period last year.
Earnings Estimate Trends
Trends in earnings estimate revisions are often correlated with near-term stock price movements. For Telesat, the consensus earnings per share (EPS) estimate for the upcoming quarter has remained unchanged over the past 30 days. Typically, a stock's price may not sustain upward movement without corresponding trends in earnings estimates. Observers will be monitoring TSAT to determine if the recent price increase can be sustained.
