Skip to content
Subscriber Only
Leila Abboud

Satellite Operators Knocked Out of Orbit

Profit warning is evidence of structural problems in sector

Unlike the Lou Reed song, this certainly wasn't a case of Satellite of Love. Eutelsat's shock profit warning appeared to come out of the heavens for shareholders, pushing the shares down more than 30 percent on Friday morning.

Unfortunately, this isn't a one-off for the sector. It follows a similar, though less dramatic, warning from rival Inmarsat last week. Investors should expect more pain. This is an industry under pressure from technology changes and overcapacity, which means its famously fat margins might be slimmer forever.