Orbital’s Revenues Up But Earnings Down

Orbital’s Revenue Rises as Earnings Fall
Space News

Satellite and launch-vehicle manufacturer Orbital Sciences Corp. on July 22 reported record quarterly revenue but said earnings were eroded by a work stoppage on NASA’s Orion crew transport vehicle, the in-orbit failure of the Intelsat Galaxy 15 satellite and acquisition charges following the purchase of General Dynamics’ satellite business.

For the three months ending June 30, the Dulles, Va.-based company’s revenue were $337.7 million, up 25 percent compared to $270.1 million for the same period in 2009. But net income fell to $6.3 million, down from $8.7 million a year ago.

The General Dynamics satellite business looks to be generating more revenue than expected in the civil-government satellite sector and has added some $100 million to Orbital’s backlog. In addition, the company said that ultimately it should recover most of the Orion-related charges from NASA, which told contractors in May to set aside program funds in anticipation of the project’s cancellation. That directive forced Orbital to stop work on the Orion launch abort system it was building as a subcontractor to Lockheed Martin Space Systems….

J.R. Thompson said the company’s two biggest ongoing development programs — the Taurus 2 rocket and the Cygnus space station cargo carrier that Taurus 2 will launch -– are proceeding on schedule for a launch between April and June 2011.

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Orbital Sciences Corporation (NYSE: ORB – News) today reported its financial results for the second quarter of 2010. Second quarter 2010 revenues were $337.7 million, up 25% compared to $270.1 million in the second quarter of 2009. Second quarter 2010 operating income was $12.2 million, compared to $12.8 million in the second quarter of 2009.

Net income was $6.3 million, or $0.11 diluted earnings per share, in the second quarter of 2010 compared to net income of $8.7 million, or $0.15 diluted earnings per share, in the second quarter of 2009. The second quarter of 2010 included $1.6 million of transaction expenses related to the acquisition of the spacecraft development and manufacturing business of General Dynamics Advanced Information Systems, Inc. (GD). Orbital’s free cash flow* in the second quarter of 2010 was negative $76.5 million compared to positive $15.8 million in the second quarter of 2009.

Mr. David W. Thompson, Orbital’s Chairman and Chief Executive Officer, said, “Orbital’s second quarter 2010 revenues were substantially higher than last year’s second quarter sales, setting a new record for the company. Operating income increased modestly, excluding the one-time transaction expenses incurred in connection with the GD spacecraft business acquisition in April.

“This year’s second quarter results were also impacted by unanticipated costs related to the Galaxy 15 communications satellite anomaly that occurred in April 2010 and the effect of the termination of the Orion human spacecraft contract in May.

“In our operational programs, the company conducted five successful space missions — including three ‘first flights’ of new launch systems — and continued to make steady progress on the Taurus II launch vehicle and Cygnus spacecraft development programs in the quarter.”