By Gianluca Lo Nostro
May 12 (Reuters) - European satellite operator Eutelsat on Tuesday reported third-quarter revenue broadly in line with market expectations, as growth in its low Earth orbit internet business helped offset continued weakness in video.
Investors are watching for the point at which LEO growth outweighs the decline in Eutelsat's legacy broadcast business, after the company's $3.4 billion acquisition of OneWeb in 2023 reshaped it as a connectivity provider.
Like-for-like revenue from
video, government services, mobile and fixed connectivity for the three months ended March 31 rose 0.9% year-on-year to 284 million euros ($334 million), compared with a compiled analyst consensus of 286 million euros. Estimates had ranged between 276 million and 296 million euros.
Revenue from low Earth orbit, or LEO, services jumped 65%. Revenue from video fell 13.3%, hit by contract terminations and the impact of sanctions on Russian channels. Connectivity revenue rose 15.3%.
Since the OneWeb acquisition, the company has expanded its satellite internet services to tap demand for space-based connectivity, driven in part by the growing popularity of Elon Musk's Starlink.
The Paris-based group owns OneWeb, a network of more than 600 LEO satellites that provides internet services to government, military, aviation and maritime customers. France and Britain, two of its largest investors, back Eutelsat as Europe's main homegrown rival to Starlink.
Eutelsat said revenue from a 10-year contract with the French military is expected to be recognised from the fourth quarter ending in June.
The company recently secured about 5 billion euros in government-led refinancing. The first deliveries of 440 new OneWeb satellites are due by the end of this year, with launches set to begin in 2027.
($1 = 0.8511 euros)
(Reporting by Gianluca Lo Nostro; Editing by Matt Scuffham)
