Globalstar Inc (NYSEMKT:GSAT) On A Bull Run

Shares of Globalstar Inc (NYSEMKT:GSAT) have been steadily climbing up the charts all year. Now, they've taken off like a rocket ship after the satellite company said that the Federal Communications Commission had been in contact with it. According to Globalstar's release, the FCC's Office of the Chairman said that an order has been circulated in advance of anticipated action from the full commission regarding the authorization of the company's Terrestrial Low-Power Service.The service, also known as TLPS, has been pending before the FCC since late 2012, and Globalstar believes that TLPS can get five times the distance and four times the throughput of public Wi-Fi systems. With an order expected soon, the big move higher signals that a positive resolution to the long-standing issue is right around the corner. This is the news shareholders have all been waiting for. L. Barbee Ponder, Globalstar’s General Counsel & Vice President Regulatory Affairs, said:

“The Commission's staff has spent a tremendous amount of time and effort on this lengthy proceeding. We look forward to the Commission adopting a final order authorizing Globalstar’s TLPS.”

Total revenue for the first quarter of 2016 was $21.8 million compared to $21.0 million for the first quarter of 2015, an increase of $0.8 million, or 4%. This increase was driven by higher service revenue resulting from 6% growth in GSAT’s ending subscriber base, offset partially by a decrease in revenue generated from equipment sales. The continued shift to a larger percentage of revenue from service revenue, which has a higher margin, and away from equipment sales revenue, is contributing to increasing EBITDA. From Q1 ’15 to Q1 ’16 subscriber count increased by 38,000, as GSAT approaches 700,000 total subs and this contributed to an increase in adjusted EBITDA of 58% compared to the year-ago period. CEO Jay Monroe said:

“Total revenue during the first quarter of 2016 grew 4% over the prior year’s first quarter as we continue to grow and diversify our subscriber base internationally, even in the face of continued currency exchange rate pressure. Service revenue, which improved 9% over the same period, drove a nearly 60% increase of Adjusted EBITDA as our service revenue generates higher margins than equipment sales. As it relates to our second-generation ground network, we appreciate the working relationships we developed with both Hughes Network Systems and Ericsson over the years as these contracts near completion. In concert with the Globalstar network engineers, Hughes is completing final over-the-air testing, and Ericsson is working on its last tests allowing us to go live soon. We look forward to the revenue growth opportunities that the new ground system will provide, beginning with the introduction of a set of new products across Duplex, SPOT, and commercial Simplex. Finally, although we continue to be pleased with the progress made in our FCC proceeding, as we have previously stated, given its current status and in deference to the Commission’s deliberative process, we will not provide additional comment at this time."

Also in the first quarter, GSAT received supplemental-type certificate for the FAA, general aviation antenna products market. This approval permits Globalstar's 1,700 handsets, first-generation Sat-Fi product and SPOT Trace to be integrated directly into the cockpit communication system. SPOT Trace will track a plane's location every 2.5 minutes, while GSAT's other voice and data products provide pilots and passengers with the ability to make and receive calls, update travel times, change flight plans, arrange for services upon touchdown and stay in touch with family, friends and colleagues. This opens up a market to thousands of general aviation pilots who can now have access to reliable and affordable connectivity.

Currently trading with a market cap of $2.56 billion, GSAT is on an incredible run that we think is just getting started. CEO Jay Monroe knows how to build a company and TLPS is a great foundation to build off of. We will be updating Insider Financial as soon as we know more. For continuing coverage on GSAT, sign up for our free newsletter today and get our next hot stock pick!Disclosure: We have no position in GSAT and have not been compensated for this article.