The space units of aerospace giants Boeing and Lockheed Martin both suffered a dip in third quarter revenues as reduced defense expenditure hit sales. In comparison, Orbital Sciences reported a substantial rise in revenues over the same period.
Boeing’s…
The space units of aerospace giants Boeing and Lockheed Martin both suffered a dip in third quarter revenues as reduced defense expenditure hit sales. In comparison, Orbital Sciences reported a substantial rise in revenues over the same period.
Boeing’s Network & Space Systems unit, part of its Defense, Space & Security subsidiary, saw a 14% year-on-year fall in revenues from US$2.7bn in Q3 2009 to US$2.34bn in Q3 2010. This decline mirrored the unit’s revenues for the first nine months of the year which fell 17% to US$7.02bn. Earnings took an even greater hit, down 40% in the third quarter, from US$252m in 2009 to US$152m in 2010, and down 29% for the year to date, from US$698m to US$493m.
The company stated that the reason for the fall was primarily due to lower volume on the US DoD’s Brigade Combat Team Modernization (BCTM) and Ground-based Midcourse Defense (GMD) programs. Backlog, however, increased from US$7.5bn at the end of June 2010 to US$8.3bn, driven by the contract to construct Inmarsat’s three next generation satellites and an extension to the company’s International Space Station contract.
At the same time, Lockheed Martin Space Systems reported a 5% year-on-year decrease in net sales for the quarter from US$2.07bn to US$1.968bn. Year-to-date sales also fell, from US$6.05bn in the first nine months of 2009 to US$5.97bn in 2010. Quarterly operating profit also fell, but only nominally, down from US$236m in Q3 2009 to US$235m in Q3 2010, while it is up for the year to date from US$672m in 2010 to US$693m in 2010.
Lockheed pointed to sales declines in space transportation and strategic and defensive missile systems, although stated that sales in government satellites had offset this somewhat.
Meanwhile, Orbital Sciences revealed a 13% increase in third quarter reveues, from US$277.1m in 2009 to US$314.5m in 2010. This rise was matched by a sharp upturn in operating income, up 43% for the quarter to US$19.4m. The company also generated better than expected free cash flow of US$28.9m in the quarter.
Orbital’s chairman and CEO, David Thompson, commented: “The company’s revenue growth was driven by substantial increases in our satellite and space systems and advanced space programs segments.” This was primarily due to increased activity on communications satellite contracts which was bolstered by the second quarter US$55m acquisition of the satellite business of General Dynamics.
