Maxar looking to the future after tough times
Space company Maxar Technologies has not had it easy in recent months but its new CEO wants to turn the pages somewhat with greater U.S. government growth a key part of the story.
It has been a tumultuous six months for space and satellite company Maxar Technologies, which has faced several headwinds during that time including a continued slump in its commercial geostationary satellite business and the loss of a key imagery spacecraft used by many U.S. government agencies.
Maxar also appointed a new CEO in January amid that eventful period, which has seen the stock fall from nearly $52.00 to almost $5.00 per share as of Friday morning’s open. An activist equity research group’s campaign against Maxar’s financial profile factored in that decline as well.
During Maxar’s fourth quarter and year-end earnings call Thursday, new CEO Dan Jablonsky outlined to investors the company’s plans for transitioning and repositioning itself for longer-term growth and profitability.
After markets closed Thursday, Maxar reported a $1.26 billion net loss for last year partly on charges related to the satellite loss and a weakening commercial “GEO” satellite market.
Revenue did climb nearly 30 percent to $2.14 billion with contributions from the late 2017 DigitalGlobe acquisition that eyed a greater U.S. government presence. Maxar’s overall U.S. government revenue totaled $890 million last year, according to regulatory filings.
Westminster, Colorado-based Maxar has decided that it will keep the so-called “GEO Comsat” business that resides in its SSL division, but will operate that production line “on a much smaller scale” than before, Jablonsky said.
The company did entertain offers for that business and sold one building at SSL’s Palo Alto, California campus in December.
Jablonsky told analysts that as Maxar decided what to do and also visited customers, the company concluded “we actually have a real world-class asset in Palo Alto and in the San Jose operations, decades worth of heritage, key technologies, an employee base that is technologically advanced and just sort of world-class in how we think about it.”
Another component of Maxar’s transition will be a restructuring that sees the company go by that name alone. Jablonsky said that through this “One Maxar” approach, the company will be one operating entity versus having four business units in a corporate structure.
In early January, Maxar ended its contract with the Defense Advanced Research Projects Agency for an in-orbit satellite repair service initiative. That decision to leave the “Robotic Servicing of Geosyncrhonous Satellites” program was made the heels of the loss of Maxar’s WorldView-4 imagery satellite in early January.
Jablonsky indicated Maxar simply needs to concentrate both on replacing the lost revenue from WorldView-4 and “potentially accelerating the longer term replacement with WorldView Legion,” the replacement constellation anticipated to begin launch in late 2020 or early 2021.
Legion is one piece of Maxar’s plan to increase emphasis on small satellites and government business.
Based on customer feedback so far, Jablonsky believes the “Legion class bus will be competitive in a broad spectrum of US government missions and we expect it'd be a growth engine alongside a highly promising portfolio of smaller satellite, robotics and space infrastructure capabilities,” he said on the call.
It is the U.S. government market that Maxar sees promise in and one of the main reasons it undertook the acquisition of DigitalGlobe. Late last year, Maxar officially became a U.S.-headquartered and registered company so it could take on more classified space contracts in particular.
The company renewed and expanded its EnhancedView contract for satellite imagery services to federal agencies last year and also added a separate cloud infrastructure integration job related to that.