PARIS — Satellite imagery provider DigitalGlobe on May 3 said its commercial business is facing unexpected headwind this year and will fall short of the company’s earlier growth projections of 25 percent or more.

The Longmont, Colo.-based company said the slower-than-forecasted growth in what remains a minority of its total business — U.S. and foreign defense and intelligence customers account for 80 percent of DigitalGlobe’s revenue — is due mainly to large contracts that are taking longer to materialize than predicted. The potential revenue has not disappeared, it has only been delayed, company officials said.

The shortfall will mean DigitalGlobe, which this year had promised investors that total revenue in 2011 would increase by 10 percent, to $355 million, now is more likely to gross somewhere between $330 million and $355 million.

“The pipeline is not where we need it to be to deliver” on the previous revenue target, DigitalGlobe Chief Executive Jeff Tarr said in a May 3 conference call with investors.

Tarr, who became chief executive in March following the resignation of Jill D. Smith, declined to give examples of the kind of contract that was taking longer than expected to conclude.

He said the company has recently sealed a multiyear agreement with a fifth Direct Access Partner, meaning a government that, following U.S. government approval, is able to task and download data directly from DigitalGlobe’s WorldView-1 or WorldView-2 Earth observation satellites in its assigned territory.

This fifth customer will add about $10 million in annual revenue for DigitalGlobe, bringing the total Direct Access Partner revenue to $50 million per year, starting in 2012. Tarr declined to disclose the identity of the latest direct-access customer. He said DigitalGlobe signed a five-year agreement with Turksat, Turkey’s satellite telecommunications operator, to resell DigitalGlobe imagery products to Turkish government and business customers.

DigitalGlobe operates three satellites. Its QuickBird spacecraft, which was launched in 2001 and is nearing the end of its operational life, was raised to a higher orbit in March to save fuel and delay its retirement by about 18 months, to early 2014. At that point, the company’s WorldView-3 satellite, which has five times QuickBird’s capacity, is expected to be in operation.

Raising QuickBird’s orbit from 450 kilometers to 482 kilometers reduced its imaging resolution quality by about 7 percent, Tarr said.

DigitalGlobe in mid-2010 signed a contract valued at up to $3.55 billion over 10 years with the U.S. National Geospatial-Intelligence Agency under which the company will provide a monthly output of imagery. The contract’s monthly value will increase once the WorldView-3 satellite is in orbit, and following the addition of seven new ground stations located at medium-latitude territories. The first four of these facilities are expected to be in operation by the end of 2011, Tarr said.

The company remains confident that the U.S. government contract, called EnhancedView, is on solid ground and will not be materially affected by the ongoing budget-reduction effort among all U.S. government agencies.

For the three months ending March 31, DigitalGlobe reported revenue of $77.1 million, which was flat compared with the same period a year earlier. Defense and intelligence contracts accounted for $61.7 million in revenue, down 1.4 percent compared to a year ago. But the figure does not include some $24.8 million in EnhancedView contract revenue that has been deferred, but ultimately will be booked.

Of this defense and intelligence revenue, the Direct Access Partner program accounted for $9.4 million from the four existing customers.

Commercial revenue, at $15.4 million, was up 6.2 percent compared with the first three months of 2010.



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Peter B. de Selding was the Paris bureau chief for SpaceNews.