Earnings Briefs

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The U.S. Department of Defense and intelligence agencies accounted for more than 50 percent of Orbital Sciences Corp.’s revenue in 2004, company executives said.

The company finished the year with revenue of $675.9 million in 2004, a 16 percent increase over the $581.5 million in revenue it posted in 2003, the company said March 2. Orbital also recorded a $45.6 million profit in 2004, up from $18.4 million in 2003.

About 54 percent of 2004 revenue came from the Pentagon and intelligence agenices, up from 46 percent in 2003, David Thompson, Orbital’s chairman and chief executive officer, said during a March 2 telephone conference with analysts.

NASA and other civilian government agencies contributed about 24 percent of revenue, down from 27 percent in 2003, Thompson said. Revenue from commercial and international s sales of satellites and launch vehicles also declined, falling from 21 percent in 2003, to 18 percent in 2004.

The company’s satellite and related space systems segment posted revenue of $331.7 million in 2004, up from revenue of $218.6 million in 2003. Operating income for the segment jumped 47 percent to $21.5 million, as a $12.6 million increase in the science, technology and defense satellite product line overcame poor performance in the communications satellites product line.

Revenue in the launch vehicle segment declined slightly from $333.3 million in 2003 to $323.3 million in 2004, with revenue from the Orbital Boost Vehicle for the Ground B ased Midcourse Defense system accounting for 55 percent of revenue. Segment operating income slipped from $32.8 million in 2003, to $30.1 million in 2004, due to the revenue decline.

Orbital does not expect cuts to the Ground -b Based Midcourse Defense system and the Kinetic Energy Interceptor (KEI) programs in the U.S. Missile Defense Agency’s 2006 budget request to have an adverse effect on revenue or profit, Thompson said.

“The outlook is very positive in missile interceptor vehicles and other defense-related programs,” Thompson said. “Despite a potential overall reduction in missile defense funding in 2006 we anticipate good revenue growth and additional options exercises in both [the Ground Based Midcourse Defense program] and KEI over the next one or two years.”

Orbital booked about $505 million in new orders in 2004, with defense-related customers accounting for 61 percent of new orders, Thompson said. NASA and other civilian agencies contributed about 32 percent of new orders, with commercial and international satellite operators contributing 5 percent.

The defense segment’s share of new orders is expected to grow in 2005, Thompson said. NASA orders are expected to fall due to cutbacks in funding for science programs, while the need to replace aging commercial communication satellites could see increased business in that area in 2005, he said.

Orbital’s backlog stood at $2.3 billion at the end of 2004, and the company expects to perform more than 30 space and missile defense missions during 2005 as well as delivering 12 to 14 satellites and launch vehicles. The company expects 2005 revenue to fall in the $700 million to $725 million range.

Iridium Increases 2004 Revenue, Subscriptions

Revenue at Iridium Satellite LLC rose 23 percent in 2004, as the company ended the year with 114,000 subscribers, Iridium announced Feb. 23. The company ended 2003 with 93,000 subscribers.

Iridium Satellite also reported positive earnings before income taxes, depreciation and amortization (EBITDA) for 2004, rebounding from a negative EBITDA in 2003. Bethesda, Md.-based Iridium Satellite, a privately held firm created in the wake of the bankruptcy of the original Iridium, does not report its complete financial information.

The improvements for Iridium Satellite were driven by the company’s three largest segments, maritime, aviation and defense/government, Carmen Lloyd, Iridium Satellite’s chairman and chief executive officer, said in a statement.

“We are extremely pleased with the pace of growth, the level of subscribers and the financial condition of the company,” Lloyd said. “We are in a unique position as the only company providing global coverage including both polar caps. Our network is proving to be a valuable asset for a broad range of both conventional, as well as new, voice and data applications.”

In 2005, Iridium Satellite plans to roll out new services, including a new communications architecture that will allow customers to talk or transmit data to multiple users simultaneously and a less expensive data modem that provides short-burst communications.

Com Dev Breaks Even On 34% Revenue Gain

Space hardware manufacturer Com Dev International Ltd. broke even in its 2005 first quarter as revenue improved 34 percent, the company announced.

Cambridge, Ontario-based Com Dev reported revenue of 22.5 million Canadian dollars ($18 million) in the quarter ended Jan. 31, up from revenue of 16.8 million Canadian dollars in the 2004 first quarter. Reaching break even in the 2005 first quarter was a slight improvement over a small loss the company posted in 2004.

John Keating, Com Dev’s chief executive officer, said the company’s performance was curtailed by seasonal lulls in business and increased spending on research and development, and expanding the company’s production capacity.

“While the bottom-line performance achieved in the first quarter is well below levels seen in recent quarters, I am very pleased with the progress made in completing our necessary expansion activities, all of which target improving our ability to respond to increased demand and to do so with greater efficiency,” Keating said in a statement. “We are very confident in our ability to book orders and grow revenue, gross margins and profitability in the coming quarters.”

Com Dev recorded new orders valued at 19 million Canadian dollars in the first quarter, and the company’s backlog stands at 68 million Canadian dollars.