Orbital Sciences Corp. reported double-digit increases in revenue
, operating income and net profit for 2007 – and even a double-digit increase in headcount, up 17 percent for the year, to 3,400 people – and said it is increasingly likely to build a medium-class expendable rocket called Taurus 2.
With its three main divisions all showing profitable growth, the Dulles, Va.-based company said it is willing to take a temporary hit to earnings by investing in a rocket that would fill the gap to be created by the expected retirement of the United Launch Alliance Delta 2 rocket.
In a Feb. 14 conference call with investors, Orbital Chief Executive David W. Thompson said the company will refrain from a final commitment to Taurus 2 until this
fall, following a final design review. Full-scale production will begin only if potential customers, especially the U.S. government, confirm their interest.
“We seem to be making good progress in securing launch orders for the first Taurus 2 rockets,” Thompson said. “If we do proceed in its development, which I think is likely, then we believe Taurus 2 has the potential to expand our current space launch vehicle business at least four-fold over the next 3-4 years, from $75 million in 2007 to over $300 million by 2012.”
Thompson said a new rocket design planned by AlliantTechsystems is not viewed as a Taurus 2 competitor because indications are that it is being positioned to carry larger satellites. But the United Launch Alliance Delta 2 rockets, even if they are no longer in production, present a near-term threat, he said.
“The incumbent Delta 2 rocket is a more significant competitor, especially since there are several unassigned [Delta 2] vehicles in inventory,” Thompson said. “It appears that restarting Delta 2 production is probably not affordable. But for awhile we may coexist with some of the residual inventory units of the Delta 2, and there are a handful of those.”
Orbital expects to launch two Pegasus air-launched vehicles in the first half of 2008. One Taurus vertical-launched rocket is planned for late 2008, with another in early 2009. The company’s first Minotaur-4 vehicle is scheduled for launch in late 2008.
Orbital plans to spend between $40 million and $45 million on Taurus 2 development this year. But it could add as much as $25 million to the company’s revenue in 2008 if the expected advance orders materialize.
The company is one of several firms vying for what is known as a space act agreement with NASA
under a program called COTS, or Commercial Orbital Transportation Services. NASA is expected
to select Feb. 19 at least one and possibly more applicants to receive or divide about $175 million still left in the program’s budget after NASA terminated its COTS space act agreement with RocketplaneKistler.
If Orbital is selected, this would provide the first contract for a launch of the Taurus 2 rocket.
A COTS win
also would give Orbital a firmer position in NASA’s human-spaceflight program beyond its current work on the Orion crew-transport vehicle. The COTS program
also would debut Orbital’s new Leostar satellite design, a platform that has applications for in-orbit rendezvous as well as for Earth observation and military satellites.
Thompson said Orbital forecasts that 2008 will be another robust year in the global market for commercial, geostationary-orbiting telecommunications satellites, a market in which Orbital has been the dominant niche player in recent years by building about half of the
smaller, less-powerful communications satellites headed for geostationary orbit.
Orbital has sold 18 of its Star platform telecommunications satellites since 2001, a market share of 50 percent for this class of commercial spacecraft, according to Orbital estimates. Thompson said between 21 and 24 commercial geostationary telecommunications satellites are likely to be ordered worldwide in 2008, and that seven or eight of these should be in Orbital’s product range.
Orbital is in the running for two such satellites early this year, one for a North American satellite operator, the other for an Asian company, Thompson said.
But as strong as the commercial market is, Orbital expects the market for military satellites will be even stronger in 2008.
Orbital reported $1.08 billion in revenue
in 2007, a 35 percent increase from 2006, with much of the increase coming from work on NASA’s Orion crew vehicle. Operating income, at $86.4 million, increased by 24 percent. Net profit rose 43 percent, to $56.7 million.
Orbital Chief Operating Officer J.R. Thompson said the company hired 625 new employees in 2007, compared to around 400 in 2006, and that it would continue hiring at this rate in 2008. Expansions of Orbital’s production facilities in Arizona and Virginia are planned for 2008 and 2009, respectively, he said.