[Satellite TODAY Insider 04-26-11] Orbital Sciences reported a 2011 first quarter revenue increase of 7 percent to $318 million, backed by an earnings-per-share rate of $0.21. This beat market consensus estimates of $0.17, the company announced in its latest financial results issued April 25.
    Orbital Sciences CEO David Thompson said that the company’s revenue growth was driven by a $25 million increase in its GEO satellite revenues and $21 million of acquired revenues. Orbital’s organic growth remained flat due primarily to an $18 million headwind from the cancelled Orion Launch Abort System program.
    Raymond James Analyst Chris Quilty told Satellite TODAY Insider that despite the market’s "tepid" response to the company’s first-quarter performance, Orbital’s results show signs potential of heading into the second half of the year. "I believe the stock can experience a meaningful ‘leg-up’ if the company is able to pull-off a successful Taurus 2 risk reduction flight in October. The event, itself, is profit neutral regardless of outcome, but a successful flight would set the company on the path toward increased launch revenues, EBITDA margin expansion, and likely multiple expansion," Quilty said.
    Orbital’s Taurus XL program had a modest impact on the company’s first quarter results. Orbital’s margins declined 270 basis points to 3.2 percent due to a loss of an $11.3 million incentive fee payment related to its previous Taurus XL failure and about $1.5 million of accident investigation costs. Offsetting the loss, Orbital booked an $11.3 million insurance settlement below the operating line.
    "The inaugural Taurus 2 demonstration flight, now fully funded, slipped by one month to October, and management indicated that cost pressures continue," said Quilty. "As Orbital moves closer towards a successful Taurus 2 NASA COTS mission in February 2012, we expect the company’s stock value to head toward the midpoint of Orbital’s historical rate."
    Separately, Orbital announced it awarded a $57 million contract to ATK for its Castor 30XL, which will serve as an upgraded second stage motor for Orbital’s Taurus 2 commercial launch vehicle.
    Orbital’s Taurus 2 medium-class launch vehicle is slated to perform commercial cargo re-supply missions to the International Space Station for NASA. It will be demonstrated under the COTS program and put into service under the Commercial Resupply Services (CRS) contract.

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