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Orbiting Wall Street 12/11/06

By | December 11, 2006


      Sirius Satellite Radio announced Dec. 4 that it was updating its year-end 2006 subscriber guidance in light of lagging holiday retail sales.

      "While strong, this year’s retail sales results since the Thanksgiving weekend have not been at the pace we had anticipated," Sirius CEO Mel Karmazin said in a statement. "We are updating our year-end 2006 subscriber guidance to between 5.9 million and 6.1 million. At the lower end of our range we will still add almost 20 percent more subscribers in 2006 than we did in 2005."

      Holiday sales in 2005 were juiced by the impending debut of Howard Stern on Sirius. The 2006 guidance range represents total net subscriber additions of approximately 2.6 million to 2.8 million, Sirius said.


      Orbital Sciences Corp. updated its 2007 earnings per share and free cash flow guidance following the pricing of a $143.8 million debt offering, Orbital announced Dec. 8.

      Orbital Sciences priced an offering of 2-7/16 percent convertible senior subordinated notes due 2027 at $143.8 million, which includes the exercise in full by the initial purchasers of their over-allotment option to purchase up to an additional $18.75 million aggregate principal amount of the notes.

      Orbital Sciences also is repurchasing 2.7 million outstanding shares of its common stock at a price of $18.83 per share, for a total value of about $50 million. The closing of the notes offering and share repurchase is expected to occur Dec. 13.

      Orbital intends to use the net proceeds from the sale of the notes, together with cash on hand, to repurchase its outstanding 9 percent senior notes due 2011 and to fund the share repurchase.

      "The debt offering and share repurchase announced yesterday is another significant step forward in optimizing the company’s capital structure, which is one of several key elements in our strategy to achieve double-digit annual earnings growth over the coming years," David Thompson, Orbital’s chairman and CEO, said in a statement. "As a result of these transactions, Orbital will greatly reduce its annual interest expense, continue its multiyear share repurchase program and enhance the company’s earnings per share and cash flow in 2007 and future years."

      As a result of the debt refinancing and share repurchase transactions, Orbital updated its previously issued preliminary financial guidance for 2007 and now expects to generate 2007 earnings per share in the range of $0.72 to $0.77, up from the previous range of $0.67 to $0.72. The company is basing its estimates on about 61 million average diluted shares outstanding and assumes the completion of the refinancing and share repurchase transactions.

      Orbital also increased its free cash flow estimate for 2007 by $5 million to a range of between $50 million and $55 million, up from the previous preliminary range of $45 million to $50 million.

      ALU, TCFP.PA

      The newly created Alcatel-Lucent signed a final agreement for the transfer of its transportation, security and space assets to Thales, the companies announced Dec. 4. The agreement comes shortly after the merger of Alcatel and Lucent.

      The deal follows a space alliance agreement among Alcatel-Lucent, Thales and Finmeccanica, in which Finmeccanica agreed to the transfer of Alcatel-Lucent’s shares in Alcatel Alenia Space and Telespazio, a pair of joint ventures between Alcatel-Lucent and Finmeccanica.

      Alcatel and Lucent night completed their merger Dec. 1, creating the largest telecommunications equipment company in the world with $24.8 billion in revenues, the Number One market share in wireline, Number Three in mobility and Number Two or Three in applications and services, depending on how you look at the market.

      In addition, the merged company passes LM Ericsson AB, with $21.6 billion in sales, to grab the telecom hardware market leadership with about an 18 percent market share versus 7 percent for Nokia/Siemens and 10 percent for Cisco Systems. Alcatel-Lucent has about a 16 percent share of the wireless market share versus Nokia/Siemens at 23 percent and Ericsson/Marconi at 26 percent.

      Thales will convene an extraordinary general shareholders’ meeting Jan. 5 to approve the transfer of the transportation and security assets. Thales then will provide the European Commission with a plan regarding the transfer of space activities by no later than April.

      Tampa Microwave Acquires Product Lines From Morrow Technologies

      Tampa Microwave completed the acquisition of the spectrum analyzer, carrier monitoring and signal intelligence receiver assets of Morrow Technologies Corp. of St. Petersburg, Fla.

      "During the past three years, Morrow Technologies has made significant investments in improving the features, flexibility, remote operability and affordability of its broadcast, satellite monitoring and [signal intelligence receiver] products," Eric Guerrazzi, managing director of E2G Partners LLC and president of Tampa Microwave said in a statement.Our immediate focus will be to capitalize on the effort expended by the talented Morrow Technologies team and bring these superior products to market."

      Engineering personnel involved in the design, development, production and customer support of the products have relocated to Tampa Microwave’s facilities in Tampa, Fla.

      "We are delighted that the spectrum analyzer product line will benefit from the great synergy with Tampa Microwave’s product line and marketing team," Sharon Morrow, president of Morrow Technologies, said in a statement

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