Orders for commercial satellites are in the “doldrums” but Dulles, Va.-based Orbital Sciences [ORB] still managed to post favorable results for third-quarter 2004, according to a research note from William Kidd, a satellite analyst with New York City-based Vintage Research. Orbital’s management indicated commercial satellite orders in 2004 are not expected to match 2003’s 17 industry-wide orders.

By Orbital’s count, the industry has received only nine orders to date, compared with 14 orders at the same point last year. Nevertheless, company management is optimistic Orbital can gain one more order in 2004.

Orbital’s third-quarter results were “in line to slightly above” for various financial indicators, Kidd wrote. Orbital’s third-quarter earnings-per-share of 18 cents beat Vintage Research’s estimate of 15 cents and the consensus forecast of 16 cents. Growth came almost exclusively from the company’s satellite segment, which is seeing a boost in defense and scientific work, Kidd wrote.

Orbital management intends to revise its 2005 guidance when it offers fourth-quarter results. However, the preliminary figures provided by its management are close to Vintage Research’s existing estimates. Management is offering guidance of $710 million to $730 million for revenues, compared to Vintage Research’s $694 million; 8-percent to 8.5-percent operating margin versus the investment firm’s 8.3 percent; and 70 cents to 75 cents for earnings per share (EPS), instead of Kidd’s forecast of 77 cents a share.

The company would consider “tuck in” acquisitions, using its rebuilt balance sheet and good free cash flow generation, Kidd wrote. Those additions would be aimed at augmenting the company’s existing product strengths.

Finally, uncertainty about whether President Bush will be re-elected and will continue his emphasis on defense spending is a slightly negative risk factor for the company’s shares, Kidd wrote.

(William Kidd, Vintage Research, 646/472-5228)