PARIS — Satellite on-board electronics manufacturerof Canada reported lower-than-expected revenue for the three months ending July 31 but told investors that a spurt of commercial satellite activity should improve results in the coming months.
Cambridge, Ontario-based Com Dev said that while only four geostationary-orbiting telecommunications satellites were ordered in the six months ending in April, 11 spacecraft have been placed under contract since then.
It is common for component suppliers like Com Dev to wait as long as six months from the time a prime contract is signed until they learn whether their bids have been accepted. In a Sept. 6 filing with the Toronto Stock Exchange, Com Dev said that of the 11 satellites ordered between May and July, it has won work on one and is competing for work on nine others.
Satellite manufacturers and operators confirmed during the World Satellite Business Week conference, held here Sept. 9-13, that calendar year 2013 likely will end with 20-22 geostationary-orbiting telecommunications satellites being booked.
While often commercial in nature and function, many of these satellites are owned by emerging-market governments just entering the space business. Com Dev classifies these as civil rather than commercial spacecraft.
Of the 15 satellites ordered in the nine months ending July 31, 12 were commercial, two were civil and one was military.
For Com Dev, what counts most is not the number of satellites so much as the payload electronics suites on them. In general, larger satellites offer more work for Com Dev than smaller satellites, and those with more transponders are more promising for the company than those with fewer transponders.
Similarly, the company said the advent of high-throughput satellites plays to Com Dev’s strengths even though some of these spacecraft providing broadband connections in Ka-band do not carry high transponder counts in the traditional sense.
Com Dev estimates that it can generate between 50 percent and 300 percent more work on high-throughput satellites than on conventional telecommunications spacecraft.
The rebound in commercial satellite orders, which was expected, offsets a decline in military satellite orders that has accompanied the U.S. Defense Department’s cutbacks and the across-the-board U.S. government budget cuts known as sequestration.
“What we have is an industry-wide slowdown in military satellite orders,” Com Dev Chief Executive Mike Pley said during a Sept. 6 conference call with investors. “In fiscal year 2012, there were five U.S. [military telecommunications satellite] orders. This year, there have been none to date.”
Com Dev’s U.S. subsidiary, Com Dev USA of El Segundo, Calif., is suffering from the slowdown. Pley said no new contracts under existing U.S. Defense Department satellite telecommunications programs are expected before late next year.
Pley said Com Dev could transfer some business from Com Dev’s Ontario operation to Com Dev USA, which in any event is broadening its product portfolio and seeking to broaden its customer base beyond satellite manufacturer Boeing Space and Intelligence Systems, also located in El Segundo.
The delayed activity in the commercial sector combined with the drop in defense business mean Com Dev is unlikely to meet its revenue targets for its fiscal year, which ends in October. The company had told investors to expect 8-10 percent revenue growth for the year. Pley said it is more likely 5 percent.
Com Dev reported 208.6 million Canadian dollars ($208.4 million) in revenue in the year ending Oct. 31, 2012.
Pley said exactEarth, a startup company majority-owned by Com Dev that provides satellite-based Automatic Identification System (AIS) ship identification services to coastal authorities, continues to expand its customer base and increase the number of trials it conducts for prospective customers.
As of July 31, exactEarth had signed 98 customers and begun 68 trials, compared with a base of 60 customers three months earlier.
In an example of Com Dev’s ambition to become a satellite prime contractor on occasion, the company is building the Maritime Monitoring and Messaging Microsatellite (M3MSat) for the Canadian Space Agency.
M3MSat is scheduled for launch in December and carries an advanced AIS payload. It will be the sixth AIS-equipped satellite for exactEarth. In addition to M3MSat, three more AIS-enabled satellites are scheduled for launch by the end of 2014.