NASA announced July 27 that it has awarded a $136.2 million contract to Lockheed Martin for an October 2008 launch of the Lunar Reconnaissance Orbiter aboard an Atlas 5 rocket. Lockheed Martin beat out Boeing, which had offered its4 rocket for the launch contract.
To Supply Parts For European Military Craft
Canada’s Com Dev will perform preliminary work developing components for a European military telecommunications satellite under a contract whose initial value is $5.2 million. Once a full go-ahead is approved , the work will be valued at about $18 million, Com Dev announced July 27.
The Cambridge, Ontario, builder of satellite multiplexers and switches did not name the customer or the program . Com Dev said the work, to be done over the next 17 months, would be done at the company’s Canadian and British plants. Com Dev is a contractor for the British Skynet 5 military communications satellite program, whose prime contractor is EADS Astrium. EADS Astrium also is prime contractor for Germany’s two Satcom Bw satellites, which were recently ordered .
XM Revises Year-End Subscriber Projections
Regulatory issues and a legal dispute with the recording industry did not help XM Satellite Radio’s performance during the 2006 second quarter, as the company’s losses widened and its subscriber lead over rival Sirius Satellite Radio narrowed.
XM of Washington signed up fewer customers during the three-month period ending June 30 than in last year’s second quarter, prompting XM to revise downward its total new subscriber for the year.
During a conference call with analysts July 27, XM Chief Executive Hugh Panero predicted that XM will have between 7.7 million and 8.2 million subscribers at year’s end. The company already revised its predictions once this year, saying in May that it expected to bring in 8.5 million subscribers rather than the 9 million it projected after the first quarter . But Panero is holding fast to a previous prediction that XM will be cash-flow positive by the end of 2006.
XM brought in 398,012 net new subscribers during the 2006 second quarter, down from a net gain of 646,226 subscribers in the second quarter of 2005. That brings XM’s total subscriber base to 6.9 million, still significantly higher than Sirius’ 4.7 million.
Sirius of New York will release its second-quarter financial results Aug. 1, but announced in July that it added 600,460 net new subscribers during the period .
Panero attributed XM’s lower numbers in part to higher-than-expected churn rates. He also cited an “overall weakening demand” for satellite radio, a claim that previously has been disputed by analysts.
XM lost $229 million overall during the quarter, compared to a $147 million loss in the same period last year . The latest figure includes a $150 million charge for debt restructuring that the company previously announced.
XM’s revenues were up, coming in at $228 million compared to $125 million during the second quarter of 2005.
Panero said sales were affected by a Federal Communications Commission (FCC) inquiry into the emissions levels of its plug-and-play radio devices, which use an FM modulator. XM has pulled the devices off the market until the issue is resolved. Shipments of XM’s new Inno handheld listening and recording device also have been delayed due to a lawsuit filed by the Recording Industry Association of America. The group is demanding higher royalties based on the Inno’s recording capabilities.
The FCC issue drove up subscriber acquisition costs for the quarter , Panero said. The company spent $64 per new customer, compared to $50 during the second quarter of 2005.
Meanwhile, XM announced July 24 that board member Nate Davis will serve in the newly created position of president and chief operating officer .
Davis, who will continue to serve on XM’s board, previously served in senior management roles at XO Communications , Nextel Communications and MCI . Shaun Parvez, an analyst with SG Cowen & Co. of New York, said the appointment could be a sign that XM is listening to investor concerns over “management missteps” and “lackluster performance” relative to Sirius.
Adding another executive brings XM’s management model closer to Sirius’ , which has two co-presidents, Parvez added.
Missile Defense Boosts Raytheon’s Bottom Line
Missile defense helped drive a strong quarter for Raytheon Co. of Waltham, Mass., company executives said during a conference call with investment analysts July 27.
Raytheon’s Missile Systems unit recorded sales of $1.1 billion for the three-month period ending June 30 , up from $1 billion during the second quarter of 2005. During the quarter, the division booked a $208 million classified missile defense contract, and three others worth more than $100 million each, Raytheon Chief Executive Bill Swanson said during the call. “The importance of our missile defense business is becoming apparent,” Swanson said.
Rumsfeld Protests T-Sat, Missile Defense Budget Cuts
U.S. Defense Secretary Donald Rumsfeld is protesting proposed congressional reductions to the Pentagon’s 2007 budget request for a new generation of laser-linked communications satellites and for certain missile defense efforts.
In a letter sent to lawmakers July 24, Rumsfeld took issue with recommendations contained in the House and Senate versions of the 2007 Defense Authorization Act. The letter was first reported in the July 28 edition of the newsletter Defense Daily.
Citing “current world events,” Rumsfeld urged lawmakers to reconsider proposed cuts to the missile defense programs, saying they could “delay the fielding of critical defensive capabilities.” He singled out a recommendation in the House version of the bill, H.R. 5122, to deny the $55.8 million requested for studies of a European missile defense site.
Rumsfeld’s letter lists the recommended cuts to the Transformational Satellite (T-Sat) Communications System among others that the Defense Department opposes. The House bill recommended reducing the $867 million request for T-Sat by $80 million, while the Senate recommended cutting $70 million.
NASA Considers Deferring Research on Space Station
NASA managers are considering suspending U.S. research aboard the international space station next year in order to save money for the orbital laboratory’s construction.
Kirk Shireman, NASA deputy director for the station , said dropping science research in 2007 is one of several options on the table to make up for a funding shortfall of up to $100 million.
“Right now we’re quite a bit in the hole,” Shireman said July 26 during space station briefing at NASA’s Johnson Space Center in Houston. “We’ll look at a bunch of different options for the assembly budget; all those things are under consideration.”
Taiwan Scores Hits in Missile Defense Tests
The Taiwanese military successfully shot down two target ballistic missiles using Patriot interceptor rockets during a recent test, according to a July 26 news release from Raytheon, which built the interceptors.
Taiwan has a perfect record in shoot-down tests with the Patriots, having intercepted missiles as well as aircraft in exercises conducted in 2001 and 2004, according to the news release.
Dnepr Rocket Failure Destroys Cluster of Small Satellites
A Russian Dnepr rocket carrying multiple payloads crashed July 26 shortly after takeoff from the Baikonur Cosmodrome in Kazakhstan.
The rocket’s first-stage motor failed 90 seconds after liftoff, which occurred shortly before midnight, and the vehicle fell back to the ground, Russia’s Federal Space Agency reported on its Web site July 27.
The Dnepr rocket, a converted ICBM , was carrying a number of small satellites, including the Republic of Belarus’ first satellite, Belka, as well as Baumanets, UniSat-4 and several CubeSat satellites, according to the July 27 statement.
Lockheed Martin Space Posts Strong 2006 Growth
Lockheed Martin reported a 24-percent increase in its Space Systems sales for the six months ending June 30 and a 28-percent increase in operating profit for the period, saying its commercial satellite deliveries this year have been profitable and that its Atlas rocket also is increasing profitability.
In a July 25 conference call with financial analysts, Lockheed Martin officials warned Wall Street that even with growing government satellite business, the Space Systems business will not continue at this pace for the second half of 2006.
The Space Systems division reported revenues of $4.07 billion and an operating profit of $382 million for the first half of this year.
Lockheed Martin reports most of its Space Systems revenue only when the contracted satellite is delivered to the customer, or the contracted rocket is launched. That often creates dramatic swings in the division’s quarterly performance. Lockheed Chief Financial Officer Christopher Kubasik said the second quarter of this year is an example of this. For the three months ending June 30, the company reported Space Systems revenues of $2.1 billion, a $475 million increase over the previous year.
Kubasik said the launch vehicle business — selling U.S. Atlas and Russian Proton launch vehicles — was flat year-on-year. But after delivering no commercial satellites in the second quarter of 2005, Lockheed Martin delivered two in the second quarter of 2006: the Astra 1KR forGlobal of Luxembourg; and the JCSAT-9 for JSAT Corp. of Tokyo. Those two satellites combined added close to $200 million in revenue to the quarter’s results, Kubasik said.
Another $100 million of the increased sales for the second quarter is explained by increased business in the company’s Strategic and Defensive Missiles Systems business, which is part of the Space Systems division.
Finally, work on U.S. Defense Department and other U.S. government satellites added around $175 million to the division’s revenue increase in the second quarter.
Jerry Kircher, vice president for investor relations, said the two satellite deliveries in the quarter “were nominally profitable. They’re not robust profit centers for us but they were positive.” He said the two satellites contributed about half of the $43 million in operating profit increase for the quarter.
Kircher said the company’s Atlas rocket division contributed the other half of the increased operating profit.
The company expects to deliver five or six commercial telecommunications satellites in 2006 — compared to zero for 2005 . The next satellite to be delivered is JSAT’s JCSAT-10 satellite, scheduled for launch Aug. 11 aboard a European Ariane 5 rocket.
Kubasik said about 70 percent of the Space Systems division’s anticipated 2006 “delivery events” — when the revenues are booked — have already occurred. The company is sticking with previous forecasts that the Space Systems business would generate between $7.5 billion and $8 billion in revenue. But it increased its pretax earnings forecast for the year by $25 million, to between $700 million and $725 million.
EADS’ Space Profit, Revenues Increase
EADS’ Space division reported sharply higher revenues and pretax profit for the six months ending June 30, with the Astrium satellite division, Ariane 5 rocket work and the military satellite services division all driving the increase, parent company EADS reported July 27.
Europe’s biggest aerospace company said its space division is on track to increase its contribution to the company’s profit in the second half of this year. In a conference call with financial analysts, EADS Chief Financial Officer Hans Peter Ring said the space division’s revenues for the first half of 2006 were 1.27 billion euros ($1.6 billion), up 9.7 percent over a year earlier.
Pretax profit, at 36 million euros, increased more than fivefold and was equivalent to 2.8 percent of revenues. Boosting the space division’s profit margins has been a key goal of EADS management.
The Astrium satellite division won five telecommunications contracts in the first half of the year, a performance that Ring said is without precedent for the company. The space division is prime contractor for the Ariane 5 heavy-lift launch vehicle, which has launched twice so far this year and there are plans for another three or four more launches by the end of the year.
The space service’s division includes Paradigm Secure Communications of Britain, which is supplying telecommunications services to the British Ministry of Defence and to NATO and several other European governments under multi year contracts.
For the first half of 2006, the space services business accounted for 9 percent of revenues, according to EADS. The space transportation division, including the Ariane 5 work and the French M51 strategic missile, accounted for 48 percent, with Astrium satellites contributing the remaining 43 percent.
Space division backlog was 11.9 billion euros as of June 30, EADS said.
MDA Confident of Winning Radarsat Constellation
Canada’s MacDonald, Dettwiler & Associates (MDA) reported increased revenues and pretax profit for its Information Systems division, whose principal components are the company’s satellite and other space-systems businesses.
The Richmond, B.C., company said its space-business orders now tend to arrive in smaller, multiple contracts signed over the course of a given program, rather than in single, larger deals. Chief Executive Daniel Friedmann said this is true of Canada’s Radarsat Constellation, a next-generation radar Earth observation satellite, as well as contracts with the Canadian Space Agency and with U.S. government agencies.
Dividing contracts into smaller slices reduces the risk and means that MDA will be unlikely to post backlog numbers equivalent to more than 1.5 or two times its annual revenues, Friedmann said in a July 26 conference call with financial analysts.
MDA’s Information Systems division reported revenues of 192.2 million Canadian dollars ($168.7 million) for the first six months of 2006, an increase of nearly 6 percent over the first half of 2005. Pretax profit, at 31.5 million Canadian dollars, was up 6.2 percent from a year earlier.
The Information Systems division’s firm backlog stood at 572 million Canadian dollars as of June 30. Friedmann said he is confident MDA will be selected prime contractor for the Radarsat Constellation program, a group of three to six satellites in low Earth orbit, for which the Canadian government currently has budgeted about 200 million Canadian dollars. MDA up to now has received only design-study contracts for the project, which will succeed the Radarsat-2 satellite.
“For the Radarsat Constellation we have only about 10 to 14 million [Canadian] dollars in backlog for a multi-hundred-million-dollar program,” Friedmann said. “The contracts will occur in phases. The next phase will come in March at about 50 million, and then a year later at 50 to 100 million, and so on, significantly reducing risk.”
MDA’s Radarsat 2 satellite, to replace the aging Radarsat-1, is scheduled for launch in March 2007 aboard a Russian Soyuz rocket. Friedmann said MDA recently expanded its existing Radarsat ground network to 27 stations around the world, meaning customers worldwide for the most part can receive Radarsat data within four hours of its being collected by the satellite.
MDA announced July 19 an unidentified U.S. government agency had contracted for an additional $3.4 million in Radarsat-1 data to be delivered over a 12-month period.
The company announced in June that it had won a contract valued at 15.4 million Canadian dollars from Japan’s Mitsubishi Electric Corp. to provide components for Japan’s future H2-A Transfer Vehicle, HTV, an unmanned tug that will deliver supplies to the international space station.
MDA Chief Financial Officer Anil Wirasekara said the Information Systems division should be able to maintain gross profit margins “in the mid to high teens.”
Satellite Reports Strong Second Quarter
Iridium Satellite LLC of Bethesda, Md., saw its customer base grow by more than 25 percent during the second quarter of 2006, bringing its total number of subscribers to 159,000 as of June 30.
Iridium brought in $53.6 million in revenue during the period , the company said in a July 24 press release. The figure was 31.4 percent higher than during the second quarter of 2005, the press release said. Iridium did not previously release its financial figures for the 2005 second quarter.
The company’s earnings before interest, taxes, depreciation and amortization were $13.2 million for the quarter, which Iridium said was a 99.6 percent increase over the same quarter last year. Commercial business accounted for about 70 percent of the company’s revenue, according to the release.
In a telephone interview July 26, Dan Colussy, chief executive officer of Iridium, attributed the growth to a more-widespread use of the company’s low-cost data device than anticipated. The device is used for asset tracking by a variety of groups, including the maritime and aviation sectors, as well as by government entities.
Colussy also said Iridium plans to have conceptual designs of its next-generation satellite system developed later in 2006.
Microcosm’s LOX Tank Passes Qualification Tests
Microcosm Inc. of El Segundo, Calif., announced July 13 that its full-scale liquid-oxygen (LOX) tank built from lightweight composites has passed final qualification tests for use aboard the planned Scorpius Space Launch Co.’s Sprite Small Launch Vehicle.
Microcosm tested a 107-centimeter diameter LOX tank to nearly four times its operating pressure of 550 pounds of thrust per square inch. The tests were conducted in a cryogenic chamber using liquid nitrogen, according to the news release.
With the help of lightweight LOX tanks, Scorpius — a spin-off company from Microcosm — estimates its Sprite vehicle will be able to launch 476 kilograms to low Earth orbit versus only 318 kilograms with its original design and parts, according to the news release.
MT Aerospace Wins Japanese HTV Component Contract
MT Aerospace of Augsburg, Germany, will provide components for Japan’s HTV unmanned space tug under a contract withLtd. of Tokyo, MT Aerospace announced July 25.
Under the contract, valued at about $1 million, MT Aerospace will deliver hardware for the interior structure of the HTV, or H-2A Transfer Vehicle, which is under development and designed to transport supplies to the international space station. MT Aerospace said the contract is important in establishing the company in the Japanese market.
MT Aerospace is already under contract to provide Mitsubishi Heavy Industries with tank domes to be used on Japan’s H-2A rocket. Deliveries of the HTV and H2-A components are scheduled to continue until 2009, MT Aerospace said.
NPOESS Data-Transfer Testing Successful
Raytheon Co. and NASA have successfully completed early data-transfer testing of the National Polar-orbiting Operational Environmental Satellite System (NPOESS) , Raytheon of Waltham, Mass., announced July 24.
NASA and Raytheon, which is responsible for the ground segment as part of its subcontract with NPOESS prime contractor Northrop Grumman Space Technology, Redondo Beach, Calif., conducted data-transfer testing for 12 consecutive days between Svalbard, Norway, and Goddard Space Flight Center in Greenbelt, Md., using the hardware for the system.
The testing is part of the NPOESS Preparatory Project, which also will fly early versions of key mission sensors as well as test the system’s ground segments.
“This testing of simulated NPOESS weather data is a significant risk-reduction activity for the NPOESS development,” Mike Mader, vice president and Raytheon’s lead program manager for NPOESS, said in the news release.
Telenor Unveils Satcom Kit for Emergency Use
Telenor Satellite Services has developed a mobile satellite communications kit to use in the event of an emergency or natural disaster when terrestrial communications are unavailable, the Oslo, Norway, and Rockville, Md.-based company said July 25.
The 12-kilogram kit includes all the equipment necessary for emergency responders, government agencies, relief organizations and businesses to access voice, data and Internet communications when local infrastructures are damaged or destroyed. The kit includes a Hughes Broadband Global Area Network terminal, a portable solar panel for power, Voice Over Internet Protocol handsets, rechargeable batteries and power adapters.
“Telenor’s mobile satellite emergency response kit is specifically designed to be carried into an emergency area to keep telephony and Internet communications up and running regardless of the conditions of the local infrastructure,” Bo Norton, vice president of channel sales for Telenor, said in the news release.
FCC Rejects XM Attempt To Comply With Standards
XM Satellite Radio must find a new way for its radio devices to comply with Federal Communications Commission (FCC) emission standards, now that the FCC has rejected its first proposed solution.
The FCC had told Washington-based XM in an April 25 letter that its Delphi XM SKY Fi2 radio devices were in violation of FCC emission standards. In a U.S. Securities and Exchange Commission filing dated July 19, Washington-based XM said it had received new equipment certifications after testing the radio. But the FCC dismissed those new certifications, according to the filing. A dismissal is different than a denial, the filing said, because if the equipment is eventually deemed compliant, the certifications can be reinstated.
In a July 20 filing, XM’s competitor, Sirius Satellite Radio of New York, said some of its own radios with FM transmitters were not compliant with FCC rules, and that the company is no longer selling those models.
Northrop Grumman Ships Satellite Signal Amplifiers
Northrop Grumman Corp. of Los Angeles delivered a power amplifier to the U.S. Army to augment satellite communications for troops on the move, the company announced in a July 19 press release.
The extremely high frequency, solid-state power amplifier is compact yet can deliver a high output, the release said. The combination of small size and high power is necessary for high-data-rate, wideband satellite communications, the release said.
John Nilsen of the Army’s Communications-Electronics Research, Development and Engineering Command, for whom Northrop Grumman built the equipment, said July 19 that the amplifiers will be incorporated into the satellite communications terminals in order to boost the power of their antennas.
Harley-Davidson Offers XM Radio on Its Motorcycles
Harley-Davidson Motor Co. of Milwaukee will be the first motorcycle company to offer XM Satellite Radio on certain bike models, according to a July 17 press release from Washington-based XM.
A new radio called the Road Tech AL20 has been developed for many 1996 and later-model Harley Davidson motorcycles. The radio is mounted on the bike’s handlebars and costs approximately $250. The radio is waterproof and designed to take into account lighting issues and the constraints of riding gloves, the release said.
Telenor Subsidiary Wins ISO 9001:2000 Certification
Telenor Slovakia received an internationally recognized quality certification, its parent company, Telenor Satellite Services of Rockville, Md., announced July 18.
The subsidiary, which is based in Bratislava, Slovakia, received its ISO 9001:2000 certification for business management systems, according to the July 18 press release.
The certification is the result of an intense audit that looks at the company’s design and development, production, installation and service procedures, the release said. The certification is valid for three years and requires yearly quality assurance audits.
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