Aerojet Rocketdyne Takes Loss on AJ-26 Engine Problems
WASHINGTON — The parent company ofannounced Oct. 10 that it took a $17.5 million loss in its latest fiscal quarter because of issues with the AJ-26 rocket engine that it provides for Orbital Sciences Corp.’s Antares launch vehicle.
Rancho Cordova, California-based GenCorp Inc. reported a net loss in the company’s fiscal third quarter, which ended Aug. 31, of $9.5 million. In filings submitted to the U.S. Securities and Exchange Commission (SEC) after the markets closed Oct. 10, the company also reported a net loss for the year to date of $61.8 million.
GenCorp singled out the AJ-26 engine, a refurbished version of the Soviet-era NK-33, as a major reason for the loss. The company said it took pretax contract loss of $17.5 million on the program in the latest quarter, and $31.4 million loss on the program for the year to date.
In its SEC filing, GenCorp blamed the loss on “the cost to repair or replace engines as necessary in light of the previously reported engine test failures,” a likely reference to a May 22 test-stand failure of an AJ-26 engine at the NASA Stennis Space Center in Mississippi. The company also cited the costs of increased hardware inspections of engines yet to be delivered, repairs to the test stand and costs associated with delayed engine deliveries.
Aerojet Rocketdyne has a contract with Orbital to provide 20 AJ-26 engines, two of which are used in the first stage of the Antares launch vehicle. Aerojet has delivered 10 of those engines, including the two installed on the Antares scheduled to launch Oct. 24 from the Mid-Atlantic Regional Spaceport at Wallops Island, Virginia, on a resupply mission to the international space station.
Neither Aerojet nor Orbital has disclosed details regarding the cause of the May test failure. Speaking at the 65th International Astronautical Congress in Toronto Sept. 30, Frank Culbertson, executive vice president and general manager of Orbital’s Advanced Programs Group, said investigators had narrowed down the failure to two potential root causes, but did not discuss them. Both potential causes can be screened for during engine inspections, he said.
Repairs to the Stennis test stand, Culbertson said, have been completed, and engine tests are scheduled to resume in October. “We had to replace a number of components, but everybody worked hard to turn that around so we could get back to testing,” Culbertson said.
The future of the AJ-26 is unclear. Orbital is considering several possible replacement alternatives, including solid-rocket motors from, for the next block of Antares vehicles. Orbital this year announced that it would acquire ATK’s Aerospace group in a deal expected to close before the end of the year.
Culbertson said Orbital would make a decision before it submitted a proposal to NASA for the follow-on to the Commercial Resupply Services contract for delivering cargo to the international space station. The proposal deadline is Nov. 14.
GenCorp’s SEC filing made no mention of two other recent developments affecting the company. On Sept. 17,announced a partnership with Blue Origin to develop a new engine to replace the RD-180 used on the Atlas 5 rocket’s first stage. Aerojet has been shopping its own RD-180 alternative, dubbed the AR1, which it says could be ready to fly within four years at a cost of less than $1 billion.
On Sept. 29, Aerojet Rocketdyne said it signed a contract withfor studies of several engines, including the AR1
Both announcements took place after the company’s fiscal third quarter ended Aug. 31.
Despite the loss the company reported for the third quarter, GenCorp stock was up nearly 3 percent on the New York Stock Exchange at the close of trading Oct. 13.