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Explosion could dent Orbital profit

Wednesday, October 29, 2014 - 01:22

NASA's cargo resupply program makes up over a fifth of Orbital Sciences' sales, and the blast could hurt profit by $6 billion, according to analysts. Fred Katayama reports.

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The explosion of the unmanned supply rocket made by Orbital Sciences could dent its bottom line. The Antares rocket blew up shortly after lift off from a launch pad in Virginia and burst into flames. The NASA contractor says the rocket and the cargo ship it carried for the international space station cost $200 million. NASA's cargo resupply program makes up over a fifth of Orbital's sales, according to Wells Fargo. Jefferies analyst Howard Rubel says a six-month delay of a rocket launch could hurt revenue by $100 million and profit by $6 million, amounting to 7 cents a share. The company earned $68 million last year on revenue of $1.4 billion. Orbital's shares nose-dived in early trading, slicing off much of its 30 percent gain this year. Rubel said, "The failure may hamper, but not prevent Orbital from signing contracts with additional customers for Antares." The other NASA private contractor that ferries supplies to the space station is Elon Musk's private company, SpaceX. But Rubel said he doesn't believe the explosion will impact Orbital's planned merger with Alliant Techsystems' aerospace and defense unit. Alliant's shareholders meet next month to vote on the issuance of its shares to Orbital stockholders.

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Explosion could dent Orbital profit

Wednesday, October 29, 2014 - 01:22