Why Maxar Technologies Stock Plummeted 45% in March

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What happened

Shares of Maxar Technologies (NYSE: MAXR) fell 45% in March, according to data from S&P Global Market Intelligence, after the space technology leader announced weaker-than-expected fourth-quarter 2018 results.

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To be sure, Maxar stock plunged more than 20% on March 1, 2019 alone -- the first trading day after the company's report hit the wires. In it, the company revealed its quarterly revenue had declined 9% year over year to $496 million, translating to a huge net loss of $950 million, or $16.10 per share. Analysts, on average, were expecting earnings of $1.06 per share on revenue closer to $560 million.

So what

To be fair, that enormous loss came as the company recognized a net $883 million impairment charge related to a combination of the previously announced loss of its World View-4 satellite, saw headwinds in the GEO Comsat market, and had a decline in market value relative to its book value.

The company also announced a restructuring that should reduce annual costs by $60 million to $70 million. That will include reducing the size of its GEO Comsat business -- which the company opted to keep following a strategic review of alternatives, including a potential sale -- "to better align its costs with revenue."

Now what

Maxar further opted to reduce its quarterly dividend to $0.01 per share (down from CAD$0.37 previously), which will provide another $60 million in annual cash flow. The company also received approval from its lenders to amend its credit facility for additional financial flexibility.

As it stands, Maxar will remain focused on executing on its funded backlog (which ended the year at $2.4 billion) and winning new business. But until we see more signs of stabilization to that end, I suspect Maxar stock will remain under pressure.

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Steve Symington has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.