Wednesday, July 25, 2007

In The Beltway Orbit: GeoEye

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