PREVIEW-GeoEye, DigitalGlobe seen posting solid 2nd-qtr results

* GeoEye, DigitalGlobe report results on Aug 10

* GeoEye seen posting three-fold jump in profit

* Watch for: DGI's comments on Oct launch of WorldView-2

By A.Ananthalakshmi

BANGALORE, Aug 7 (Reuters) - Expectations are high for commercial satellite imagery companies GeoEye Inc (GEOY.O) and DigitalGlobe Inc (DGI.N) as they will be reporting a 'quarter of firsts' when they report second-quarter numbers on Monday.

DigitalGlobe will report its first quarterly results as a public company, while GeoEye will report the first full quarter of operational contributions from its newest satellite, GeoEye-1.

"Both results will look relatively similar, but if you look at year-over-year change, it will be more positive for GeoEye," Canaccord Adams analyst Jeff Rath said.

Dougherty & Co analyst Jeff Evanson said GeoEye would probably be the "most exciting" due to full revenue recognition from GeoEye-1.

Dulles, Virginia-based GeoEye launched its second satellite GeoEye-1, the world's highest-resolution commercial Earth imaging satellite, in September last year.

GeoEye-1, financed in part by the National Geospatial-Intelligence Agency (NGA), provides imagery for Google (GOOG.O) Earth and Google Maps, and government customers in the United States, Europe, Asia and the Middle East.

"We are looking for a 65 percent to 70 percent sequential increase in their revenue and GeoEye-1 will be delivering the bulk of that," Evanson said.

Analysts expect GeoEye to post a three-fold increase in net profit and more than double its revenue, according to Reuters Estimates.

Longmont, Colorado-based DigitalGlobe, on the other hand, is expected to post a modest decline in its numbers, as the year-ago period had full contribution from its WorldView-1 satellite.

DigitalGlobe, which went public in May, supplies its images to location-based applications such as Google Maps and Microsoft (MSFT.O) Virtual Earth, and navigation device makers like Garmin Ltd (GRMN.O).

Dougherty's Evanson expects to see strong defense and intelligence sales, and flat to slightly down commercial sales.

Wall Street will also be on the watch for commentary regarding progress on the companies' satellites.

DigitalGlobe is set to launch its new satellite WorldView-2 in October this year. The satellite, which will be capable of collecting images of up to 975,000 square kilometers a day, is expected to double the company's collection capacity.

GeoEye will address the technical issue with GeoEye-1 that caused a small area of an image to lack color when collected in a particular operating mode.

In June, the company said the problem does not materially impact revenue and even in the worst case, the impact will be less than 5 percent of projected revenue. [ID:nBNG337693]

BUDGET BOOST

Canaccord Adams' Rath said the companies are expected to discuss the benefits they are likely to get from the additional budget being allocated by their largest customer, the NGA. Both the companies have about 70 percent to 75 percent exposure to the NGA, a U.S. Department of Defense agency that develops imagery and map-based intelligence solutions.

In April, the U.S. government said it would buy expensive spy satellites and order more imagery from the two commercial providers to plug gaps in satellite coverage. [ID:nN07488320]

Dougherty's Evanson said the U.S. budget for satellite imagery is increasing at more than 30 percent per year.

"Satellite imagery is becoming an increasingly important part of the U.S. military's defense and intelligence capability, and as the two leaders in the space, the two companies will benefit dramatically," Evanson said.

DigitalGlobe has about 45 percent share of the satellite imagery market while GeoEye has about 35 percent, said Evanson.

Analysts agree that long-term outlook for both the companies remains strong as demand appears to be greater than current supply. (Editing by Ratul Ray Chaudhuri)