Eutelsat sees revenue growth as OneWeb expands, shares drop on margin outlook
FILE PHOTO: The logo of European satellite operator Eutelsat is displayed at the company’s headquarters in Issy-les-Moulineaux, near Paris, France, March 30, 2026. REUTERS/Gonzalo Fuentes/File Photo
Aug 7 : Eutelsat said on Friday it expected slight revenue growth in 2027 as rapid expansion of its OneWeb satellite connectivity business offsets declines elsewhere, though weaker-than-expected profitability sent its shares down as much as 8 per cent.
The company said it expected slight growth in operating revenue in 2026/27, while profit margins were expected to remain broadly unchanged from last year.
Full-year revenue rose 3 per cent on a like-for-like basis to €1.24 billion ($1.43 billion), driven by a 69.5 per cent increase in low-Earth orbit (LEO) revenue, which accounted for a quarter of group sales. Adjusted core earnings, however, fell to €632.4 million and the profit margin dropped to 51.2 per cent, below the 52.4 per cent average analyst estimate compiled by the company.
Eutelsat's shares were down 7 per cent at 0837 GMT. Bernstein analyst Aleksander Peterc said weak guidance was behind the market reaction despite a strong fourth quarter.
Finance chief Sebastien Rouge told analysts that Eutelsat was still in a phase where the rapidly growing LEO segment generated lower margins than the legacy geostationary business.
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The French group operates the only global LEO satellite network outside Elon Musk's Starlink and has benefited from European efforts to reduce reliance on U.S. satellite providers.
Chief Executive Jean-Francois Fallacher said the market was undervaluing Eutelsat relative to Starlink following SpaceX's stock market debut in June.
"When we look at the valuation of Starlink we believe we are undervalued as a company, looking at the asset we are currently running and operating," Fallacher said.
He added that SpaceX's disclosures highlighted the scale of Starlink's dependence on revenue from the U.S. government, which was a surprise.
($1 = 0.8678 euros)
