Connect with us

Business News

Space stocks had a rough first quarter as several companies struggled with supply chain disruptions

Published

on

Virgin Orbit’s modified 747 jet “Cosmic Girl” releases the company’s LauncherOne rocket for a mission on January 13, 2022.

Virgin Orbit

Space companies reported results for the first quarter of the year over the past several weeks – with many CEOs complaining of supply chain disruptions pushing back hardware deliveries and launch schedules.

“Everyone’s getting delayed. I haven’t heard from a single satellite operator in the last 12 months – whether they’re a new entrant, whether they’re longstanding operators – everyone’s kind of getting moved to the right a little bit, mostly for the same reasons … the supply chain issues and whatnot,” Telesat CEO Dan Goldberg said during his company’s earnings conference call.

Many space companies went public last year through SPAC deals, but most of the stocks are struggling despite the industry’s growth. The shifting market environment, with climbing interest rates hitting technology and growth stocks hard, have weighed on space stocks. Shares of about a dozen space companies are off 50% or more since their market debut.

Beyond supply chain hiccups, most of the public companies reported continued quarterly losses, as profitability remains a year away or more for many space ventures.

Below are summaries of the most recent quarterly reports for Aerojet Rocketdyne, AST SpaceMobile, Astra, BlackSky, Iridium, Maxar, Momentus, Mynaric, Redwire, Rocket Lab, Satellogic, Spire Global, Telesat, Terran Orbital, ViaSat, Virgin Galactic and Virgin Orbit – alongside the stock’s year-to-date performance as of Thursday’s close.

Satellite imagery company Planet has yet to report its first quarter results. The company uses a 2023 fiscal year calendar that began on Feb. 1.

Aerojet Rocketdyne: -12%

While the propulsion specialist draws a majority of its $511 million in first quarter sales from defense-related contracts, Aerojet Rocketdyne continues to draw a major portion of revenue from the space sector. The company’s adjusted EBITDA profit for the quarter rose 18% to $69 million, compared to the same period a year prior, with a backlog of $6.4 billion in multi-year contracts. Aerojet Rocketdyne remains embroiled in a board proxy fight between CEO Eileen Drake and Executive Chairman Warren Lichtenstein, which began during the now terminated Lockheed Martin deal.

AST SpaceMobile: -5%

The satellite-to-smartphone broadband company saw minimal revenue of $2.4 million in the first quarter, with slightly increased operating expenses of $32.7 million from the previous quarter. AST continues to work toward the launch of its BlueWalker 3 demonstration satellite this summer, with about $83 million invested in constructing and testing the spacecraft so far. The company has $255 million in cash.

Astra: -66%

BlackSky: -46%

Seattle-based satellite imagery specialist BlackSky reported first quarter revenue of $13.9 million with an adjusted EBITDA loss of $9.5 million, up 91% and 53% from the same period a year prior, respectively. BlackSky has $138 million in cash. CEO Brian O’Toole emphasized the company sees increasing demand for Earth imagery from both the U.S. and foreign governments, with BlackSky stating it “believes capacity” from the current 14 satellites it has in orbit “will be more than sufficient to support increased customer demand.”

Iridium: -11%

The satellite communications provider delivered revenue of $168.2 million, an operational EBITDA profit of $103.2 million, and 1.8 million total subscribers in the first quarter – up 15%, 17%, and 15%, respectively, from a year prior. Iridium CEO Matt Desch noted the company’s supply chain team is managing issues and “we seem to be doing as well as anyone in getting the parts we need,” but said the “problem is that demand continues to exceed forecasts.” Iridium has “tremendous demand” from Ukraine, Desch said, with the company shipping thousands of devices to provide services such as mobile phones to Internet-of-Things connectivity.

Maxar: 1%

The satellite imagery and space infrastructure company reported $405 million in first quarter revenue, up slightly from a year prior, with an adjusted EBITDA profit of $84 million, a 25% increase. Maxar’s order backlog fell 14% from the fourth quarter to $1.6 billion. CEO Dan Jablonsky said during the company’s call that its long-awaited first WorldView Legion satellite launch is delaying to September due to an issue during testing. Jablonsky added that he is “disappointed that we’ve had another delay” with Maxar’s timeline for getting its WorldView Legion satellites in orbit. It has “been hit with supply chain and COVID-related issues over the past couple of years.”

Momentus: -31%

The spacecraft maker reported no revenue in the first quarter, and an adjusted EBITDA loss of $17.2 million – up from a loss of $13.2 million a year prior. Momentus spent the quarter preparing to launch its Vigoride spacecraft this month to demonstrate its capabilities, and signed agreements to fly on future SpaceX rideshare launches. The company has $136 million in cash on hand.

Mynaric: -33%

The laser communications maker announced preliminary results for 2021 in a shareholder letter, with the German company having listed on the Nasdaq late last year. Converted from euros, Mynaric in 2021 brought in $2.6 million in revenue, and has about $50 million in cash. Mynaric’s customer backlog for 2022 has seen it receive about $21 million from contracts for laser communications units.

Redwire: -40%

The space infrastructure conglomerate made $32.9 million in revenue for the first quarter, up slightly from a year prior, with a backlog of orders worth $273.9 million. Redwire has about $6 million in cash, with about $31 million in available liquidity through existing debt.

Rocket Lab: -62%

The small-rocket builder reported $40.7 million in first quarter revenue, up 147% from a year prior – and $34 million of that revenue came from Rocket Lab’s spacecraft business, with the remaining minority from launches. Rocket Lab had an adjusted EBITDA loss of $8 million, down 8% from a year ago, and has $603 million in cash. The company’s CFO Adam Spice said during the earnings call that its “supply chain is relatively intact” due to vertical integration, but buying production equipment for Rocket Lab’s coming Neutron vehicle is “suffering supply chain issues,” as “there’s no amount of money in the world that can accelerate some of that stuff.”

Satellogic: -51%

The satellite imagery company announced 2021 results earlier this month, having gone public in January. Satellogic has 22 satellites in orbit, with plans to launch a dozen more this year. The company had $4.2 million in 2021 revenue, with an adjusted EBITDA loss of $30.7 million.

Spire Global: -56%

Small satellite builder and data specialist Spire reported first quarter revenue of $18.1 million and an adjusted EBITDA loss of $9.7 million, up 86% and 62%, respectively, from a year ago. The company has $91.6 million in cash. Spire forecast full year 2022 revenue from annually recurring customer contracts between $101 million and $105 million. Spire CEO Peter Platzer said during the quarterly call that the company continues to aim to be “cash flow positive in 22 to 28 months,” with weather data helping customers ranging from the agriculture industry to a Formula 1 team, and its marine data helping support the cargo industry during the global supply chain challenges.

Telesat: -42%

Terran Orbital: -50%

The spacecraft manufacturer reported first quarter revenue of $13.1 million, up 25% from a year prior, with a $222 million backlog – in part thanks to a contract to build satellites for the Pentagon’s Space Development Agency. Terran Orbital saw an adjusted EBITDA loss of $14.7 million, quadruple its loss in first quarter 2021. It has $77 million in cash. Terran co-founder and CEO Marc Bell highlighted supply chain disruptions on the call, but emphasized that the company is increasingly vertically integrating its manufacturing.

ViaSat: -18%

The satellite broadband provider is on a different reporting cycle than the calendar year, with the company having reported fourth quarter results Wednesday. Viasat brought in $702 million of fourth quarter revenue, up 18% from the period a year ago, and an adjusted EBITDA of $134 million, down 9%. The company has nearly $1 billion in liquidity, largely through debt. In a letter to shareholders, Viasat noted the end of its fiscal year “had some challenges” due to regulatory delays, as well as increased R&D spending “on attractive growth opportunities.”

Virgin Galactic: -50%

The space tourism company reported negligible revenue for the first quarter, and an adjusted EBITDA loss of $77 million – 38% higher than the same period a year ago. The company has $1.22 billion in cash on hand. Although its current spacecraft and carrier aircraft refurbishment program is “progressing well” and expected to be finished in September, Virgin Galactic announced the delay of launching its commercial tourism service to the first quarter of 2023. Virgin Galactic CEO Michael Colglazier said the delay in commercial service was due to “little issues” that pushed the company’s refurbishment schedule back. He added that, “like many companies around the world, we’re experiencing elevated levels of supply chain disruption.”

Virgin Orbit: -40%

The alternative rocket launcher reported first quarter revenue of $2.1 million, down 61% from the same period a year ago, and an adjusted EBITDA loss of $49.6 million, up 71%. Virgin Orbit noted the decrease in revenue was due to “launches contracted during early development phase with introductory pricing.” The company has $127 million in cash, with a total contract backlog of $575.6 million. CEO Dan Hart said during the company’s conference call that it still plans to launch between four and six times this year, with one complete so far.

Business News

Trump media company subpoenaed in federal criminal probe of SPAC deal

Published

on

Former U.S. President Donald Trump gives the keynote address at the Faith & Freedom Coalition during their annual “Road To Majority Policy Conference” at the Gaylord Opryland Resort & Convention Center June 17, 2022 in Nashville, Tennessee.

Seth Herald | Getty Images

Donald Trump’s media company was subpoenaed by a federal grand jury in connection with a criminal probe, according to the company with which the former president’s firm plans to merge.

Digital World Acquisition Corp. said in a filing Friday that Trump Media and Technology Group received a subpoena from the grand jury in Manhattan on Thursday. The Trump company also received a subpoena from the Securities and Exchange Commission regarding a civil probe on Monday, DWAC said.

DWAC also said some current and former TMTG employees have also recently received grand jury subpoenas.

The filing came days after DWAC said the government investigations could delay or even prevent its merger with Trump’s newly formed company, which includes Truth Social, a social media app intended to be an alternative to Twitter.

Neither TMTG nor a spokeswoman for Trump immediately responded to CNBC’s requests for comment.

The Justice Department and the SEC, which regulates the stock market, are investigating the deal between DWAC and Trump Media. By merging with DWAC, which is a kind of shell company called a special purpose acquisition company, or SPAC, Trump’s firm would gain access to potentially billions of dollars on public equities markets.

Trump established Truth Social months after Twitter banned him for his tweets on Jan. 6, 2021, when hundreds of his supporters stormed the U.S. Capitol in a bid to overturn Joe Biden’s victory in the presidential election. Trump Media’s CEO is former Rep. Devin Nunes, one of the former president’s most ardent loyalists in the Republican Party. Trump is also considering whether to run for president in the 2024 election.

Trump has continued to spread the lie that the election was stolen from him. His alleged involvement in the Jan. 6 insurrection is being probed by a House select committee that has accused the former president of being at the center of a multipronged conspiracy to block the peaceful transfer of power to Biden.

Early criticism of the Trump-DWAC deal came from Sen. Elizabeth Warren, D-Mass. In calling for an investigation, she wrote to SEC Chair Gary Gensler in November, telling him that DWAC “may have committed securities violations by holding private and undisclosed discussions about the merger as early as May 2021, while omitting this information in [SEC] filing and other public statements.”

DWAC shares are far off their highs, closing Friday at $24.20. The stock had surged above $90 in October, after the deal with Trump’s group was announced.

DWAC on Monday revealed in a securities filing that it learned June 16 that each member of its board of directors received subpoenas from the same federal grand jury.

The grand jury sought documents similar to those the SEC already requested as part of its civil probe, DWAC said. The company itself was served with a subpoena a week ago with similar requests, along with other requests relating to communications, individuals and information involving Rocket One Capital.

DWAC also revealed Monday that a board member, Bruce J. Garelick, had told management that he would quit the board during the previous week. Garelick said his resignation “was not the result of any disagreement with Digital World’s operations, policies or practices,” according to the company filing.

— CNBC’s Kevin Breuninger and Thomas Franck contributed to this story.

This is breaking news. Please check back for updates.

Continue Reading

Business News

Walmart is working on a response to the Supreme Court’s abortion decision, CEO says in memo

Published

on

Walmart CEO Doug McMillon speaks at the CNBC Evolve conference November 19th in Los Angeles.

Jesse Grant | CNBC

Walmart CEO Doug McMillon told employees on Friday that the company is weighing how to respond to a Supreme Court decision that ended the federal right to an abortion.

“We are working thoughtfully and diligently to figure out the best path forward, guided by our desire to support our associates, all of our associates,” he said in a memo sent to employees on Friday. “We will share details on our actions as soon as possible, recognizing that time is of the essence.”

He did not say what changes the company is considering, such as if it may cover travel expenses for workers who must travel to another state where abortion is available.

The memo was previously reported by The Wall Street Journal.

Arkansas, home to Walmart’s headquarters, is one of several states with severe limits or bans on abortions that went into affect after the high court’s ruling.

Walmart is also the country’s largest private employer. It has about 1.6 million employees across the country, including many who live and work in states across the Sunbelt with abortion restrictions such as Texas, Oklahoma and Florida.

Since the Supreme Court reversed Roe v. Wade, companies across the country have had a mix of reactions. Some, including JPMorgan Chase, Dick’s Sporting Goods and Target, have announced new plans to cover employee travel to other states for abortions. Others, such as Kroger and Apple, said they already cover travel for medical treatments and reproductive health care. And still others have remained quiet.

Amazon, the second-largest private employer in the country, said in May that it would pay up to $4,000 in travel expenses each year for non-life-threatening medical treatments, including abortions.

Walmart already covers employee travel for some medical procedures, such as certain heart surgeries, cancer treatments and organ transplants.

Walmart health benefits cover only some abortions. According to the company’s employee handbook, charges for “procedures, services, drugs and supplies related to abortions or termination of pregnancy are not covered, except when the health of the mother would be in danger if the fetus were carried to term, the fetus could not survive the birthing process, or death would be imminent after birth.”

Plan B, an over-the-counter form of contraception, is covered only if the person gets a prescription. The pill, often called the “morning after pill,” works by preventing ovulation or preventing a fertilized egg from attaching to the womb. It can be taken after unprotected sex or when contraception fails.

Other forms of contraception are also covered with a prescription, including birth control pills, injections and intrauterine devices, or IUDs. Some anti-abortion activists also oppose IUDs because they can stop a fertilized egg from implanting in the uterus.

In Friday’s memo, McMillon said Walmart has gathered input from employees as it decides what to do. He also alluded to the size and diversity of both the company and its customer base.

“We know our associates and customers hold a variety of views on the issue, and this is a sensitive topic about which many of us feel strongly,” he said. “We want you to know that we see you, all of you. No matter what your position on this topic is, we want you to feel respected, valued and supported.”

Continue Reading

Business News

FCC authorizes SpaceX to provide mobile Starlink internet service to boats, planes and trucks

Published

on

The Starlink logo is seen in the background of a silhouetted woman holding a mobile phone.

Sopa Images | Lightrocket | Getty Images

The Federal Communications Commission authorized SpaceX to provide Starlink satellite internet to vehicles in motion, a key step for Elon Musk’s company to further expand the service.

“Authorizing a new class of [customer] terminals for SpaceX’s satellite system will expand the range of broadband capabilities to meet the growing user demands that now require connectivity while on the move, whether driving an RV across the country, moving a freighter from Europe to a U.S. port, or while on a domestic or international flight,” FCC international bureau chief Tom Sullivan wrote in the authorization posted Thursday.

SpaceX did not immediately respond to CNBC’s request for comment on the FCC decision.

Starlink is SpaceX’s network of satellites in low Earth orbit, designed to deliver high-speed internet anywhere on the globe. SpaceX has launched about 2,700 satellites to support the global network, with the base price of the service costing users $110 a month. As of May, SpaceX told the FCC that Starlink had more than 400,000 subscribers.

SpaceX has signed early deals with commercial air carriers in preparation for this decision: It has pacts with Hawaiian Airlines and semi-private charter provider JSX to provide Wi-Fi on planes. Up until now SpaceX has been approved to conduct a limited amount of inflight testing, seeing the aviation Wi-Fi market as “ripe for an overhaul.”

The FCC’s authorization also includes connecting to ships and vehicles like semi-trucks and RVs, with SpaceX having last year requested to expand from servicing stationary customers. SpaceX had already deployed a version of its service called “Starlink for RVs,” with an additional “portability” fee. But portability is not the same as mobility, which the FCC’s decision now allows.

The FCC imposed conditions on in-motion Starlink service. SpaceX is required to “accept any interference received from both current and future services authorized,” and further investment in Starlink will “assume the risk that operations may be subject to additional conditions or requirements” from the FCC.

The ruling did not resolve a broader SpaceX regulatory dispute with Dish Network and RS Access, an entity backed by billionaire Michael Dell, over the use of 12-gigahertz band – a range of frequency used for broadband communications. The FCC continues to analyze whether the band can support both ground-based and space-based services, with SpaceX pushing for the regulator to make a ruling.

Continue Reading

Trending