GeoEye Q1 Revenues Up But Market Reacts to Possible Satellite Glitch
GeoEye (GEOY) held their Q1 analyst call today and indicated that with GeoEye-1 now up and running that its revenues increased 26% year over year. CEO Matt O’Connell indicated that they were not able reach their full run rate of imagery during the quarter because of the ramp up time after the satellite was certified by NGA. The market had been reacting favorably to GeoEye’s stock leading up to today’s call sending the company up 55% since it traded at $18/share in mid-March. But shares were down sharply at mid-day today on the news of a possible issue with imagery collection (GeoEye ended the trading day down 13%). According to Bill Schuster, the company’s COO:
Last week, we discovered a potential issue with some of GeoEye-1’s imagery collections. The satellite has different collection profiles. Our investigation team, including our camera provider, ITT, has determined that the issue is only present in one profile but not in the others. In a collection that is affected by the issue, a small part of the image lacks color, but the black and white is unaffected. 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.
O’Connell also acknowledged the initial public offering by its competitor, DigitalGlobe, that will begin trading on the NYSE on May 14 saying, "We’re pleased that our competitor, DigitalGlobe, is doing their Initial Public Offering. Their IPO will increase the attention the investing community pays to the entire geospatial industry. We need our industry to have more investor attention, more financial analyst attention and more media attention. And we know that customers like the increased transparency that comes with public companies."
