Maxar Reports Q1 Loss of $48M, and New Satellite Orders
Maxar Technologies reported consolidated revenues of $381 million for the First Quarter (Q1) of 2020, an 11.6% decline from the same time period in 2019. Separately, the company announced it has received a multi-hundred million dollar contract award to build multiple 1300-Class communications satellites for an undisclosed customer.
Consolidated revenue of $381 million was down about $50 million from Q1 2019, which Maxar said was primarily driven by a $78 million decrease in the Space Infrastructure segment which was partially offset by a $17 million increase in the Earth Intelligence segment. Maxar reported a net loss $48 million, compared to a net loss of $57 million in Q1 2019. These results come after Maxar reported a full year of revenue decline for 2019.
Explaining the results, CFO Biggs Porter said that two circumstances led to negative impacts of $32 million in the quarter and that excluding these items, the quarter was in line with expectations.
“This quarter’s results were negatively impacted by an increase in estimated costs to complete programs and scheduling penalties in our Space Infrastructure segment because of the social distancing restrictions put in place across the world to help combat COVID-19. Separately we discovered a design anomaly on a commercial satellite program in late April prior to shipment. This was during the final stage of our thorough test process and resulted in schedule revisions and cost growth,” Porter said.
Maxar CEO Dan Jablonsky said booking momentum has continued into the second quarter with the 1300-Class communications satellite contract bringing Maxar’s bookings total in Space Infrastructure to over $700 million year-to-date, on path for another year of backlog growth for this segment. He said that so far, Maxar has not seen an impact on demand for earth intelligence or space infrastructure products due to the pandemic.
“Our results this quarter reflect progress on our multi-year strategy to strengthen our company and position it for revenue, profit and cash flow growth. Importantly, we closed the MDA divestiture, which helped improve our balance sheet,” Jablonsky said.
During the company’s earnings call, Jablonsky added, “Space infrastructure … represents roughly 40% of our revenues which are typically derived for multiyear contracts for the construction of space hardware and follow-on servicing and support once on orbit. To be certain, we do not have perfect visibility, and there are always unknown unknowns out there, but our current set of revenue streams are derived from some of the most demanding customers in the world who rely on our product, that affords us some level of comfort on the outlook for our business over the year. Medium and longer term, even if the world looks a bit less certain given today’s pandemic.”