WASHINGTON -- A problem with the main camera aboard GeoEye's newest imaging satellite is not expected to affect competitor DigitalGlobe's plans to launch a spacecraft carrying a similar piece of hardware in October, officials with DigitalGlobe said May 14.

 

GeoEye on May 12 disclosed a problem with the company's recently launched GeoEye-1 satellite that affects its ability to collect color imagery. In a conference call with financial analysts, GeoEye Chief Operating Officer Bill Schuster said the newly discovered problem, which leaves small areas of black and white in certain color images collected by GeoEye-1, will not affect business with the company's main customer, the U.S. National Geospatial-Intelligence Agency (NGA).

 

GeoEye-1's imaging camera was built by ITT Space Systems of Rochester, N.Y., which built a similar camera for DigitalGlobe's planned WorldView-2 satellite. In a filing with the U.S. Securities and Exchange Commission May 14 — the same day as its initial public offering of stock — DigitalGlobe of Longmont, Colo., said WorldView-2 uses a newer version of the color imaging hardware and that no problems have been found during extensive ground testing.

 

GeoEye of Dulles, Va., discovered the GeoEye-1 camera glitch the week of May 4. Schuster said during the conference call that while the NGA's requirements will continue to be met, the problem may affect the imagery needs of other customers. The problem is unlikely to be a software issue, he said.

 

"Our investigation team, including our camera provider, ITT, has determined that the issue is only present in one profile but not in the others," Schuster said. "The issue doesn't affect resolution or accuracy. It's too early in our review to determine what the cause for this issue is, or the specific remedies which might apply. There's little or no impact to collections for our Service Level Agreement with NGA. We're still analyzing whether there may be some impact on our ability to satisfy selected needs of our other customers."

 

GeoEye-1, currently the world's highest-resolution commercial imaging satellite, was launched in September; its imagery was accepted for use by the NGA Feb. 20. The NGA, which covered about half of GeoEye-1's roughly $500 million in construction and launch costs, is now purchasing as much as $12.5 million per month worth of imagery collected by the satellite.

 

The NGA purchased $14.5 million worth of GeoEye-1 imagery in the quarter ending March 31, according to its quarterly report filed May 11 with the Securities and Exchange Commission. The company took a net loss for the quarter of $1.7 million on total sales of $45.2 million.

 

While GeoEye did not meet the NGA's GeoEye-1 imagery quota in March — the first full month following the NGA's acceptance of data from the satellite — and did not receive its full $12.5 million payment for the month, it was able to meet the requirement with several days to spare in April, GeoEye Chief Executive Matt O'Connell said during the call.

 

"We didn't reach our full run rate during the quarter because it took us a few weeks to ramp up," O'Connell said.

 

GeoEye-1 data sales to the NGA began much later than expected due to a pointing problem with the satellite that made it difficult to peg the exact location of territory being imaged.

 

International business now accounts for roughly half of GeoEye's revenue, and the company has made several changes in its international business model for GeoEye-1, O'Connell said. For its older Ikonos satellite, GeoEye sold nearly all of the imagery tasking rights over certain regions of the world to international partners, and in some cases those customers have exclusive rights to the imagery. For GeoEye-1, the company has reserved at least 50 percent of the imaging capacity over any given area for NGA and other customers, and GeoEye for the most part will retain the rights to resell the imagery, he said.

 

To support the increased volume of imagery coming in with its new satellite on orbit, GeoEye has increased production capacity at its Thornton, Colo., and St. Louis facilities by 50 percent, hiring 28 employees during the first quarter with plans to take on a total of 100 new employees this year, Steve Balthazar, the company's vice president of finance, said during the call.

 

Meanwhile, GeoEye has invested $43 million to date in the camera for its next imaging satellite, GeoEye-2, that could launch around 2012. The company may invest as much as $13 million more this year, but will not commit to building the satellite without a firm imagery-purchase commitment from the U.S. government or some other anchor customer, O'Connell said.