GeoEye CEO: Q4 may be affected by delayed order

GeoEye Inc. (Nasdaq: GEOY) CEO Matthew O'Connell said the firm’s fourth-quarter results may be affected by the delayed timing of the satellite imaging company’s task order with the National Geospatial-Intelligence Agency (NGA). O’Connell made the remarks during a midday conference call.

“The task order is for imaging alone and doesn’t include value-added work,” O’Connell said. “There might be a fourth-quarter hit. We think that delay could hit our numbers.”

The Dulles, Va.-based company is in discussions with the NGA for a new $60 million task order, but the U.S. Government has not finalized its 2008 fiscal budget, which began Oct. 1.

O’Connell said GeoEye is making “good progress” toward the launch of its GeoEye-1 satellite. Boeing Co. (NYSE: BA) has set a target launch date of April 16, 2008, for the satellite, he said.

“There are many factors beyond our control that can affect that date,” he said. “Meanwhile, the program remains fully funded.”

During September, GeoEye secured $220 million of launch plus first year on-orbit insurance coverage and $50 million of launch plus three-year on-orbit insurance coverage. GeoEye owes its insurers $41.4 million for the coverage and will be capitalized as part of the GeoEye-1 satellite’s cost and depreciated over its lifetime, which is estimated to be seven years. During October, GeoEye paid $2.2 million of the insurance premium.

During the conference call, O'Connell acknowledged its competitor DigitalGlobe’s successful launch on Sept. 18 of its satellite Worldview-1.

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