December 17, 2009 / 4:19 PM / 9 years ago

UPDATE 1-GeoEye says satellite glitch could hit 2010 revenue

(Adds analyst comments; updates share movement)

By Divya Sharma

BANGALORE, Dec 17 (Reuters) - GeoEye GEOY.O said it detected an irregularity in the antenna of its GeoEye-1 satellite and the glitch could hurt its projected 2010 revenue, sending its shares down as much as 24 percent.

GeoEye suspended imagery collections for a few days since the problem was detected on Dec. 11, it said in a regulatory filing on Wednesday.

Canaccord Adams analyst Jeff Rath told Reuters the announcement is a surprise but the situation is not unprecedented.

“If you listen to the explanation it really does not appear to be that material,” Rath said.

“The irregularity appears to limit the range of movement of GeoEye-1’s downlink antenna, which may in turn affect GeoEye-1’s ability to image and downlink simultaneously,” GeoEye said.

The market will try to discount the risk associated with any disclosure like this. And because it is a satellite, the risk element attached is bigger, Rath said.

The problem could affect a few of GeoEye’s overseas customers who own ground stations and have contracted to receive direct downlinks, the Dulles, Virginia-based satellite imagery company said

GeoEye said the glitch, however, would not impact its ongoing ability to deliver imagery to the National Geospatial-Intelligence Agency — GeoEye’s largest customer — and to its regional affiliates.

The company had in May reported another issue with GeoEye-1 that caused a small area of an image to lack color when collected in a particular operating mode.

The company said projected 2010 revenue could be hurt by as much as 10 percent. In November, GeoEye had forecast 2010 revenue of $310 million to $320 million.

Shares of the company were down 17 percent at $26.22 in late morning trade Thursday on Nasdaq. They touched a low of $24 earlier in the session. (Additional reporting by A.Ananthalakshmi in Bangalore; Editing by Vinu Pilakkott and Unnikrishnan Nair)

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