The British company, which provides voice and data communications to ships, aircraft and remote land-based locations, said maritime revenue - which accounts for about half of the total — would increase by 2-4 percent in 2011, about 2 percentage points short of analysts’ expectations.
Shares in the group fell as much as 14 percent to a 16-month low of 587 pence, the biggest faller in the FTSE 100 index, as analysts said 2011 total revenue forecasts would be trimmed.
Chief Executive Andrew Sukawaty said maritime revenue growth was slower than the company expected in the fourth quarter and in the first months of 2011.
“By selling new terminals much faster in 2010 than we had done before we were seeing a temporary drag on revenue because fleet broadband has a lower price point generally than the services being replaced,” he said.
The group installed 10,000 of the broadband terminals in the year, taking the total to 16,000. Once installed, sailors were using e-mail to stay in touch rather than making phone calls, hitting the group’s voice revenue.
Sukawaty said experience showed more bandwidth resulted in higher usage but that would take time.
Mark James at Liberum Capital said the flat revenue in maritime in the fourth quarter was likely to disappoint — he was expecting growth of 2 percent.
“Commentary is particularly cautious on maritime outlook, where management expects ongoing growth in the lower-priced Fleet Broadband products to continue to constrain revenue growth,” he said in a note.
He said analysts would likely trim their forecasts for group revenue by about 1 percent.
Investec said Inmarsat was also prudent in its outlook for its land and air services, with its leasing business the only positive exception.
“For all the other sectors, management provides caveats and cautionary statements to prevent the market getting carried away with the growth potential,” they said.
The slowdown in shipping markets took the shine off results that met market forecasts with a 17 percent rise in full-year earnings, helped by higher demand from natural disasters in Haiti and Chile in the first half.
Sukawaty said the company was seeing higher demand in the Middle East due to an increased media presence in the region, but not to the same extent as in a natural disaster where communications were destroyed.
“Media events tend to be slower duration but a big peak and generally not as much revenue,” he said.
“Natural disasters, where infrastructure is taken out, tend to be a longer peak.”
The company posted earnings before interest, tax, depreciation and amortization of $696.1 million on 13 percent higher revenue of $1.17 billion.
Inmarsat said it would receive additional revenue from its partnership with LightSquared, owned by Harbinger Capital Partners Fund, in the year ahead under a deal to carve up its spectrum in North America for potential use for mobile phone services. It received the first payment in January.
Analysts expected Inmarsat to report EBITDA of $695.1 million, according to a poll of 14 brokers.
The company raised its final dividend by 10 percent to 22.69 cents.
