October 16, 2008 / 4:42 PM / 10 years ago

UPDATE 3-Orbital Sciences Q3 profit tops Street view, shares up

*Adjusted EPS of $0.22 beats estimates of $0.20

*Raises full-year outlook

*Shares rise 8 pct

*Sets 2009 EPS of $0.85-$0.92 vs estimates of $1.04 (Adds details, analyst comments, share movement)

By Bhaswati Mukhopadhyay

BANGALORE, Oct 16 (Reuters) - Small rockets and space system maker Orbital Sciences Corp ORB.N posted a better-than-expected quarterly profit, helped mainly by growth in its advanced space programs segment, and it raised its full-year outlook, sending its shares up 8 percent.

The company, whose products include satellites and launch vehicles, however, forecast 2009 earnings below market estimates as it sees its Taurus II launch vehicle development program reducing full-year earnings by 20 cents to 25 cents a share.

Orbital is developing Taurus II, its new commercial launch vehicle, that would compete with smaller launch vehicles of Boeing Co (BA.N) and Lockheed Martin (LMT.N), JSA Research Inc analyst Paul Nisbet said.

“But it would cost a lot of R&D (research and development) over this year and the next,” Nisbet said.

The company said the program is expected to consume $60 million to $65 million of cash. In the third quarter, its R&D expenses rose $8.2 million, mainly driven by expenditures related to the program.

Net income for the third quarter fell to $12.1 million, or 20 cents a share, from $15.7 million, or 26 cents a share, a year ago.

On an adjusted basis, the company earned 22 cents a share from continuing operations.

Revenue rose to $278.6 million from $275.6 million in the year-ago period.

Sales at its advanced space programs segment rose 29 percent to $68.6 million, driven by growth in human space systems and national security satellite work, the company said.

Launch vehicles segment revenue grew 11 percent to $111.8 million, helped by increased contract activity on space launch vehicle and missile defense programs.

Analysts on average were expecting earnings of 20 cents a share, before special items, on revenue of $278 million, according to Reuters Estimates.

A lot would depend on the stance the next U.S. president would take on the missile defense programs, said Nisbet, who has a “buy” rating on the stock.

For full year 2008, Orbital expects earnings of 96 cents to 99 cents a share on an adjusted basis, up from its prior view of 93 cents to 97 cents.

It sees revenue of $1.12 billion to $1.14 billion, compared with its earlier forecast of $1.10 billion to $1.13 billion.

Analysts were looking for 97 cents a share and revenue of $1.15 billion.

For 2009, Orbital expects earnings of 85 cents to 92 cents a share, on revenue of $1.18 billion to $1.20 billion.

Analysts were expecting $1.04 a share, before items, on revenue of $1.25 billion.

“They had substantial growth over the last couple of years - more than what was generally expected. Now, I think, that is leveling off,” said Nisbet, referring to the lower-than-expected forecast.

Shares of the Dulles, Virginia-based company rose $1.49 to $19.98 in midday trade on the New York Stock Exchange. (Editing by Anil D’Silva, Deepak Kannan)

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