For Orbital Sciences Corp., revenue and rockets are taking off, propelling the company closer to its first profit.
The Fairfax-based space technology company lost $295,000 in the second quarter, but that was a significant reduction from its $1.6 million loss for the comparable quarter a year earlier.
The company attributed the improved earnings to the transition from development to production of its Pegasus rocket, a success in its initial launch in April.
Orbital's second-quarter revenue soared 50 percent, to $27 million from $18 million in the 1989 second quarter.
Orbital also sharply reduced its loss for the first half, to $1 million from $3.5 million for the first six months of 1989. Revenue climbed 42 percent in the first half, to $49.5 million from $34.7 million in the first half a year earlier.
And more recently, the company's Chandler, Ariz.-based Space Data Division has won contracts totaling $20 million from the Army, Air Force, Strategic Defense Initiative Organization and Titan Corp. covering suborbital launches.
The results impressed analysts who follow the company's fortunes.
"There's still red ink but they're moving in the right direction quite briskly," said Wolfgang Demisch, the director of research at UBS Securities Inc. in New York. "It's a pretty impressive gain. ... If they can maintain their existing rate of expansion, profitability is on the horizon."
"I'm very satisfied with their numbers," said Tony Robertson, an analyst at Baltimore-based Alex. Brown & Sons.
Alex. Brown was the lead underwriter when Orbital last April issued its initial public offering of common stock.
David Thompson, Orbital's chairman and chief executive officer, said in a statement that the continued revenue growth was based on Orbital's space and suborbital launch vehicle programs.
During the second quarter, the company said, it successfully completed its first Pegasus space launch and two suborbital launches. Orbital said it is investigating a third suborbital launch that failed.
Pegasus is a rocket carried aloft by plane and then launched into space. It is Orbital's bid to dominate the low-cost satellite launch field.
Orbital said it also benefited from its initial public offering of common stock. As a result of the offering, its balance sheet included $15 million in cash and cash equivalents and no short-term debt at the end of the second quarter.
"The right trends are all in place," Robertson said. "The reduction of R&D expenses as a percentage of revenue will continue to improve their margins. I wouldn't be surprised to see them turn profitable next quarter."