GeoEye-1 Sales Off to a Slow Start; Satellite Sensor has Glitch
WASHINGTON —began booking revenue from U.S. government purchases of imagery from its GeoEye-1 satellite during the 2009 first quarter, but recently discovered an issue with the spacecraft’s sensor that could affect sales to non-U.S. government customers, officials with the Dulles, Va.-based company said.
In a May 12 conference call with analysts, GeoEye Chief Operating Officer Bill Schuster said that under certain conditions, the satellite is unable to collect imagery in color. While requirements of the company’s primary customer, the U.S. National Geospatial-Intelligence Agency (NGA), will continue to be met, the problem may affect the imagery needs of other customers, Schuster said.
The problem, discovered the week of May 4, 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 and certified 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 worth of the satellite’s imagery per month. The NGA purchased $14.5 million worth of GeoEye-1 imagery in the quarter ending March 31; 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 satellite’s first full month of NGA-certified operations — 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 took longer than expected to be certified by the NGA due to a pointing problem that made it difficult to verify the exact location of territory being imaged by the satellite.
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-purchasing commitment from the U.S. government or other anchor customer, O’Connell said.