May 11, 2017 / 6:44 PM / 6 months ago

UPDATE 1-Eutelsat's quarterly revenue falls, but sees recovery in video

(Adds details, deputy CEO comment)

By Alan Charlish

May 11 (Reuters) - French satellite operator Eutelsat Communications said it expects its video business to return to growth in the 2018/2019 financial year, as it puts behind problems related to the non-renewal of contracts on its Hotbird satellite position.

“After we come out of the consequences of the Hotbird purge ... we see the trend for broadcast getting back to slight positive growth,” Deputy Chief Executive Michel Azibert said during a conference call on Thursday, after the company reported a 4.9 percent drop in third-quarter revenue.

Satellite companies, which generate a large part of their revenue from satellite television, have seen their business model challenged in recent years by the increased popularity of online video streaming services such as Netflix.

“I would say that [video returning to growth] is key to the stock returning to higher multiples because I think that is a big debate at the moment,“ said Berenberg analyst Robert Berg. ”We are of the view that video is a medium-term growth market but I don’t know if that is necessarily the consensus view.”

Eutelsat said the fall in third-quarter revenue was due to pricing pressure in its fixed-data business and capacity issues on the Hotbird satellites.

Total third-quarter revenue was 364 million euros ($396 million). Revenue at the video applications division, which accounted for around two thirds of the company’s business in 2016, fell 4.1 percent to 228.1 million euros.

The company confirmed its full-year and medium-term guidance. ($1 = 0.9200 euros)

Reporting by Alan Charlish in Gdynia; editing by Susan Thomas and Susan Fenton

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