UPDATE 1-GeoEye Q2 profit beats Street view

* Q2 EPS $0.46 vs est $0.39

* Q2 revenue $72.7 mln

* Shares up about 3 percent (Adds details from 10-Q, analyst comments)

By A.Ananthalakshmi

BANGALORE, Aug 10 (Reuters) - Satellite imagery company GeoEye Inc (GEOY.O) posted a better-than-expected quarterly profit, helped by full recognition of revenue from its newest satellite, GeoEye-1.

The company also said it does not expect to build or commission an accelerated GeoEye-2 satellite without assurances of an expanded National Geospatial-Intelligence Agency (NGA) agreement.

The NGA, a U.S. Department of Defense agency, is GeoEye's largest customer accounting for about 65 percent of its revenue. GeoEye-1 was funded by a $500 million contract that the company won under NGA's NextView program.

"Only when we have visibility on the expected contractual demand for a new satellite from the NGA do we expect to make a decision as to whether to invest the capital necessary to build and commission GeoEye-2 on an accelerated basis," the company said in a filing with the U.S. Securities and Exchange Commission.

Dougherty & Co analyst Jeff Evanson said the company will not seek a capital raise for GeoEye-2 that will be dilutive to shareholders.

"If the government wants GeoEye-2 by 2013, they will have to make financial commitment to it. Otherwise, GeoEye is going to fund the next satellite with free cash flow," Evanson said in an e-mail.

The company said if it does not build GeoEye-2 on an accelerated basis, it would most likely proceed in such a way that it could be used as a replacement satellite for GeoEye-1 in the 2016 to 2017 timeframe.

GeoEye, which competes with DigitalGlobe Inc (DGI.N), provides imagery for Google (GOOG.O) Earth and Google Maps and government agencies in the United States, Europe, Asia and the Middle East.

It launched its second satellite GeoEye-1, the world's highest-resolution commercial Earth imaging satellite, in September 2008.

The company posted a second-quarter net income of $9.6 million, or 46 cents a share.

Revenue more than doubled to $72.7 million from the year-ago period and rose 61 percent sequentially.

Canaccord Adams analyst Jeff Rath said the incremental improvement from the previous quarter was almost all from GeoEye-1.

Analysts were expecting earnings of 39 cents a share, before items, on revenue of $73.9 million, according to Reuters Estimates.

Backlog was about $325.2 million at June 30, the company said.

Shares of the Dulles, Virginia-based company were up 59 cents at $25.15 Monday afternoon on Nasdaq. They touched a high of $25.37 earlier. (Editing by Deepak Kannan)