SES Global reported first-quarter financial results that were generally in line with its previous forecasts, but nonetheless ran into a stock-market headwind that sent its shares falling sharply after the company released its financial results May 8.

The Luxembourg-based satellite-fleet operator reaffirmed that it will average at least 10 percent annual revenue growth between 2005 and 2007. For the three months ending March 31, the company reported revenues of 329 million euros ($419 million), up 13.7 percent from a year earlier.

EBITDA, or earnings before interest, taxes, depreciation and amortization, was 69 percent of revenues, a figure that investors think is too low but SES Global says is the natural result of adding to its satellite-services business.

For SES Global, satellite services include offering satellite-based solutions to businesses, which occasionally includes hardware. It is a business the company is entering slowly. Revenues were 48 million euros for the quarter. But EBITDA, at 1.9 million euros, was just 4 percent of revenue.

The company’s core satellite capacity-leasing business reported revenues of nearly 295 million euros, with an EBITDA of 79.4 percent. It is EBITDA margins like this that SES Global investors are used to seeing.

Mark Rigolle, SES Global’s chief financial officer, said during a May 8 conference call that the company’s strategy of using the low-margin services business to drive traffic toward SES Global’s satellite fleet remains sound.

“Our services business is like a distribution channel,” Rigolle said. “Being in this business really does add to the [satellite] fill rate.”

SES Chairman Romain Bausch said during the conference call that underlying demand for satellite capacity remains strong in Europe and North America, where the company booked new orders for six and seven transponders during the quarter, respectively. Average transponder prices in these two regions, Bausch said, were holding firm and even trending slightly upwards in some cases.

SES Global said its satellites over Europe, the Middle East and Africa were 81 percent full as of March 31, with the Americas fleet 68 percent full. The Americas fill rate was skewed by the addition of a new satellite, AMC-23, which entered service in mid-February. Connexion by Boeing, an Internet service for airline passengers in flight, is the principal customer for this satellite.

SES completed the billion-dollar acquisition of New Skies Satellites of The Hague, The Netherlands, in March, but New Skies’ figures were not included in the financial results. New Skies Chief Executive Daniel S. Goldberg said New Skies’ five satellites were 64 percent full as of March 31, compared to 60 percent a year ago.

Goldberg said the average price for new contracts signed in the first quarter was $1.4 million per transponder, up slightly from the $1.2 million per transponder cost utilized across the New Skies fleet.

After trading as high as 14.02 euros per share on the Euronext Exchange May 8, the price of SES Global shares dropped to 12.04 euros per share by the end of trading May 12.

SES Global did report one development that might have played a role in its stock drop on the Paris-based Euronext Exchange following the earnings announcement.

The company’s AMC-14 satellite, which has been fully booked by satellite-television provider EchoStar Communications of Littleton, Colo., might not be launched before mid-2007, a year later than scheduled.

Bausch said the delay was a result of two factors. First, the International Launch Services Proton M rocket, whose flight rate was slowed due to a motor-supply issue last year, suffered a launch failure in late February.

Proton M flights are scheduled to resume this summer, and the AMC-14 satellite is second in line on the International Launch Services manifest. International Launch Services spokeswoman Michelle Lyle said the company probably could launch AMC-14 this year.

But in February, an AMC-14 component failed during tests at Lockheed Martin Commercial Space Systems’ test facility, meaning the satellite will need several months of additional work.

In a response to Space News inquiries, Dee Valleras, manager of communications at Lockheed Martin Commercial Space Systems, issued the following statement May 9 about AMC-14: “In February an incident occurred in the … thermal vacuum chamber where the AMC-14 spacecraft was undergoing testing. During a high-power payload test, a test equipment component unexpectedly failed, allowing air to penetrate the chamber and initiating a corona discharge. Payload hardware suspected of being compromised during the anomaly has been removed and shipped back to the original vendors for assessment.”