Orbital Sciences Profit Rises but Revenue Falls in 2Q
Dulles, Va., July 18, 2013--Orbital Sciences Corp. reported lower second quarter revenue by 10 percent, but better profit margins improved its bottom line. Second quarter revenue dropped to US$ 333.1 million, down 10 percent from the second quarter of 2012. Net income rose to US$16.3 million, or 27 cents per share, compared to US$ 14.6 million, or 25 cents per share, as the company benefited from lower interest expenses after refinancing debt last year.
David W. Thompson, Orbital's Chairman and Chief Executive Officer, said although revenues were down, the company still reported solid bottom-line financial results with higher operating margins, net income and earnings per share compared to the second quarter of last year.
“These results reflect profit margin increases in our launch vehicles and satellites and space systems segments as well as lower interest expense resulting from our debt refinancing transaction late last year. In addition, the company reported strong quarterly new orders and option exercises totalling US$ 875 million, which boosted total contract backlog to US$ 5.4 billion,” he said.
Orbital revenues decreased by US$ 36.3 million in the satellites and space systems segment and $16.4 million in the advanced space programs segment. But Launch Vehicles segment revenues were up US$ 7.7 million and intersegment revenue eliminations were down $6.8 million.
Orbital reported US$ 845 million in new firm and option contract bookings. It also received US$ 30 million of option exercises under existing contracts.
“As of June 30, 2013, the company's firm contract backlog was approximately US$ 2.15 billion and its total backlog was approximately US$ 5.40 billion,” the company said.
During the second quarter of 2013, Orbital said it successfully carried out seven major space missions, conducted nine launches of suborbital research rockets, completed pre-launch testing, fuelling and cargo loading of the first Cygnus cargo logistics spacecraft, and delivered several satellite and rocket systems for future missions.
For the remainder of 2013, Orbital expects to carry out over 20 additional launch vehicle, spacecraft and research rocket missions. The company is scheduled to conduct its first two cargo delivery missions to the ISS with the Antares rocket and Cygnus spacecraft before the end of the year, with the Commercial-of-the-Shelf (COTS) demonstration mission scheduled for September and the first of eight operational missions under the CRS contract scheduled to take place in November or December.
Owing to delays in the timing of the awards of new commercial communications satellite contracts, Orbital lowered its guidance for full-year revenues. But analyst Raymond James said “the delays don’t indicate a loss of business but mainly represent postponed revenue that will likely be recognized in the back half of 2013 or early 2014.”
The research firm said the improved profit outlook and solid bookings should offset any concern regarding satellite delays, and the solid EPS “beat” will likely overshadow the topline revenue miss.
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