GERMANTOWN, Md. - Hughes Network Systems, a subsidiary of EchoStar Corporation (NASDAQ:SATS), has secured a production contract to supply advanced modems for the MQ-1C Gray Eagle 25M Unmanned Aircraft System (UAS), enhancing its satellite communications capabilities.
The contract, awarded by General Atomics Aeronautical Systems, Inc. (GA-ASI), involves the provision of HM400T modems, which are designed to support the U.S. Army's next-generation airborne intelligence, surveillance, and reconnaissance (AISR) missions, particularly in contested environments.
The HM400T modems are ruggedized for high-altitude applications and are equipped with the Department of Defense's (DoD) standard Enhanced Bandwidth (NASDAQ:BAND) Efficient Modulation (EBEM) waveform technology and transmission security (TRANSEC) features.
These features are intended to ensure resilient ISR transmissions and support the U.S. Army and the U.S. Army National Guard's future unmanned and manned teaming operations, addressing the growing reconnaissance, surveillance, targeting, and attack (RSTA) demands.
Rick Lober, vice president and general manager of the Defense and Government Systems Division at Hughes, expressed the company's commitment to providing secure and cost-effective communications architecture that meets the evolving requirements of modern multi-domain operations. Hughes is set to deliver these communication systems starting in Spring 2024.
The enhancement of the Gray Eagle 25M UAS with Hughes' modem technology is expected to bolster the platform's long-endurance missions and worldwide ISR capabilities.
Hughes Network Systems is a global provider of broadband equipment and services, including its flagship internet service, HughesNet®, and the Hughes JUPITER™ System, which powers internet access for millions worldwide. The company is a significant player in the satellite terminal market and a provider of in-flight video and broadband services.
This contract underscores Hughes' role in advancing communication solutions for military applications, as the information is based on a press release statement from Hughes Network Systems.
InvestingPro Insights
As Hughes Network Systems, a subsidiary of EchoStar Corporation (NASDAQ:SATS), secures a new contract to enhance U.S. Army communications, it's important to consider the company's financial health and market performance. EchoStar's current market capitalization stands at $3.61 billion, reflecting its significant presence in the Media industry. Despite being a prominent player, the company is trading at a low Price / Book multiple of 0.18, which could indicate that the market undervalues its assets relative to its share price.
InvestingPro data also reveals that EchoStar has faced challenges with profitability, as the company has not been profitable over the last twelve months as of Q1 2023. This is further emphasized by its negative P/E Ratio (Adjusted) of -3.36, suggesting that investors are wary of the company's earnings potential. Moreover, analysts do not anticipate the company will be profitable this year, which could impact investor confidence.
Considering these financial metrics, two InvestingPro Tips for EchoStar are particularly relevant. Firstly, the company operates with a significant debt burden, which may affect its long-term financial sustainability. Secondly, EchoStar is quickly burning through cash, which could pose challenges to its operational efficiency and ability to invest in new projects like the HM400T modems for the MQ-1C Gray Eagle 25M UAS.
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