EnhancedView Could Take $50 Million Hit - Aviation Week

Aviation Week is reporting that the National Geospatial-Intelligence Agency (NGA) may be forced to renegotiate the EnhanceView contract with GeoEye and DigitalGlobe due to an expected $50 Million cut to the agency's 2012 fiscal year budget with the prospect of more cuts in fiscal 2013. The original EnhancedView contract was $7.3 billion over 10 years and was signed in 2010. The contract was roughly split between the two commercial satellite providers. According to a source cited by Aviation Week:

“You’re going to have to find a way to probably restructure the current service-level agreements with both companies if they’re going to take $50 million out,” says one geospatial-intelligence industry official familiar with EnhancedView. “Any reduction in the budget on the service-level agreement means you’re changing the scope of the contract and you have to renegotiate.”

Last week we reported that NGA was going to procure less imagery in 2013 but that Pentagon investments in new spacecraft would continue.

DigitalGlobe’s Stock Woes

The Motley Fool comments on DigitalGlobe's (DGI) poor earnings, a loss of $.02 per share, and its resulting nose dive in stock price. It's most interesting comment was this: "Good PR doesn't trump bad profits." On Wednesday, May4, the market reacted to the company's quarterly report by sending the stock down from $28.72 to $25.82, a drop of 10% even though the report was within analyst's consensus estimates.

DigitalGlobe Getting Lots of Interest After Earthquake

"The demand for imagery from Japan has really run the gamut of our customer base," Steve Wood, vice president of DigitalGlobe's analysis center, said.

"I am sure we will (look at new tie-ups). We are going through such a busy period. We are getting all kind of requests," said Wood.

Governments and business are all looking for data from the company since the earthquake. The company may look for more partners (the company already work with Hitachi in Japan) but would not acknowledge if they are in talks with any big international players, Apple in particular.

- Reuters