Shares of Orbital Sciences Corp. of Dulles shot up 15 percent yesterday on news that the satellite maker would sell a portion of its stake in its money-losing joint venture, Orbcomm Global LP, for $100 million to partner Teleglobe Inc.
Orbital shares closed yesterday at 18.31 1/4 on the New York Stock Exchange, up $2.37 1/2.
Orbcomm, a satellite-based data messaging service, has been a drain on an already cash-strapped Orbital, which aborted a planned Orbcomm initial public offering in 1998 when the market soured on satellite-related offerings because of trouble encountered by companies such as District-based Iridium LLP.
Since then, the company has looked for ways to reduce its ownership stake in Orbcomm, company representatives said.
"It eases the pressure on our cash needs a lot," Orbital spokesman Barron Beneski said of Teleglobe's agreement to buy an additional 10 percent stake, leaving Orbital with 40 percent.
Orbital has dropped several bombs on Wall Street in the past year, twice announcing it would restate earnings and firing former auditor KPMG LLP over an accounting dispute.
But yesterday's news was the latest in a series of positive developments, analysts said. Late last year, for example, the company sold 33 percent of its subsidiary MacDonald, Dettwiler & Associates Ltd., which makes software and hardware that process satellite data, for $75 million.
"They've now dealt with some of the liquidity and financing issues," said Riyad Said, a senior analyst with Friedman, Billings, Ramsey Group Inc. of Arlington.
Now, according to Said, Orbital Sciences must put its accounting issues behind it. Analysts and shareholders anxiously await the company's revised earnings for the past 10 quarters. The company has been working with its new auditor, PricewaterhouseCoopers, and KPMG, to finalize those, but representatives said they have not scheduled a release date.