Washington, D.C. – Companies that sell technology to the U.S. government are more attractive to investors if their products have commercial applications as well. Examples we’ve cited recently: Ceradyne and Flir Systems.
Dulles, Va.’s GeoEye is another one in this category and its shares look modestly priced. But be careful–one technical glitch and this satellite imagery stock could fall out of orbit.
GeoEye captures, manages and sells high-resolution satellite imagery, the kind found on Yahoo! Maps or Microsoft’s Virtual Earth. The company has $158 million in trailing 12 month sales, a fleet of two satellites and two airplanes, and an archive of imagery covering 300 million square kilometers.
Its next satellite, GeoEye-1, is scheduled to launch sometime later this year. The 4,310-pound spacecraft will make 12 to 13 orbits per day, collecting daily up to 350,000 square kilometers (the size of Texas) worth of color imagery at a 16-inch or 0.41-meters ground resolution. Translated to English, that means that in the images you can see the lines on a parking lot. (No, the satellite can’t parallel park for you.)
But the upcoming launch is a high-stakes event for GeoEye, which only gets one shot to do it right. “After ‘3-2-1-liftoff,’ there’s no chance to go back and fix anything,” says Mark Brender, a GeoEye spokesman and its vice president for marketing.
The consequences of a botched launch? In September 2001, GeoEye’s predecessor company, Orbimage, put up a satellite that failed to make it into orbit. The company filed for bankruptcy in April 2002, and its common shareholders got wiped out.
Full story at Forbes.com
Andrew T. Gillies 