— Lockheed Martin, the world’s largest space company, widened its lead over rival Boeing in 2007. The Bethesda, Md.-based aerospace giant, brought in space-related revenue of $10.2 billion in 2007, compared to $7.53 billion for Boeing.
Lockheed’s space revenue grew by 4 percent in 2007, despite the fact the company split off its major launch manufacturing and service company by forming a joint venture with Boeing called United Launch Alliance (ULA), which manufactures Atlas and Delta rockets. Chicago-based Boeing’s 2007 space revenue dropped $620 million from the previous year due to the creation of ULA.
Joanne Maguire, executive vice president of Lockheed Martin Space Systems, said the company’s large scale does not affect its ability to take risks and quickly change to accommodate customers.
Lockheed is looking at the U.S. Air Force’s Transformational Satellite communications system contract, which is expected to be awarded before the end of 2008, as potentially its last major new start in the near future. “We’re going from a mission focus into more of a production focus going forward,” Maguire said. “We anticipate modest growth [in 2008] and we will continue to capture those awards that are key to building our backlog because we do have programs that are maturing.”
A new entry on the top 50 list is DigitalGlobe Inc. of , which sells commercial high-resolution satellite imagery and related services. DigitalGlobe’s revenue has risen steadily, increasing by more than $40 million per year each of the past three years. This is the privately owned company’s first appearance on the list thanks to a pending $250 million initial public stock offering that required the company to disclose its revenue: $65 million in 2005; 107 million in 2006 and $152 million in 2007. The 2006 figure would have made Digital Globe No. 47 on last year’s list.
DigitalGlobe’s $152 million revenue in 2007, alongside gains by competitor GeoEye, are two examples of a growing trend: integrating satellite data into everyday uses. The companies sell imagery to Google Earth and other mapping services, and derive 55 percent to 60 percent of their revenue from sales to the U.S. National Geospatial-Intelligence Agency (NGA), according to their filings with the U.S. Securities and Exchange Commission.
The companies’ image enhancement services offer a “perfect model” of broadening the traditional confines of space- based products, a requirement for future success in the space industry, said Carissa Christensen, managing partner of the Alexandria, Va.-based Tauri Group.
“You’ve got to have value added. That is what really drives the revenue, and the simple reason is you’re adding other sources of revenue and integrating them with the space segment,” Christensen said.
DigitalGlobe’s defense and intelligence business grew 46 percent and the September 2007 launch of its first WorldView satellite allowed a full fourth quarter with the satellite producing images, said Jill Smith, DigitalGlobe’s chief executive officer. “On the commercial side, we also saw significant growth due to the continued transition to selling more products and solutions,” she said. GeoEye outpaced DigitalGlobe by $101 million in 2005 and $44 million in 2006, but DigitalGlobe’s reported earnings of $152 million in 2007, compared to GeoEye’s $184 million, shows a continued closing of the gap.
GeoEye’s ability now to review DigitalGlobe’s financials offers an opportunity to compare the deals each company has with primary customer NGA, said Matthew O’Connell, chief executive officer of Dulles-Va.-based GeoEye. GeoEye will launch its GeoEye-1 satellite aboard a Delta 2 Aug. 22, which O’Connell hopes will boost investor and NGA confidence in the company. The satellite launch was originally scheduled for April but Delta 2 manufacturer Boeing pushed the launch to August, he said. GeoEye notched a solid 2007, despite a slowdown in the last quarter. “Our stock had a bumpy ride earlier this year,” he said. “Obviously we think it’ll pick up when we get to launch, and we’ve been regaining some of the ground we lost recently as we get closer to launch.”
Another challenge the two companies face is the recent U.S. Defense Department decision to launch its own satellites for the Broad Area Surveillance Intelligence Capability, instead of buying medium-resolution satellite imagery exclusively from the two companies. The government would continue to tap DigitalGlobe and GeoEye for comparable images. “If it does go ahead, I think that one question we all will ask is, ‘is this going to limit the amount that the commercial sector grows to provide more services to the U.S. government, or does it erode the market currently enjoyed by the commercial sector?’” O’Connell said. “We are gladdened the government talks about continued reliance on the commercial sector and buying more from the sector.”
The government’s push to integrate commercial and military space applications will play an important role in the future, Christensen said. “We’re going to see more hosted payloads and potentially a more flexible planning and integration process when looking at military use of commercial bandwidth over the long term.”