The Insider

Maxar plans sale of geostationary communications satellite business

October 31, 2018 at 1:35 PM

Maxar Technologies said today it is actively talking with potential buyers for its geostationary communications satellite business.

"There has been a step down in total number and dollar value of geostationary communication satellite awards compared to historical averages prior to 2015," the company said. "Revenues have decreased year-over-year as programs awarded prior to 2015 have been completed and have been replaced by a lower level of award value since 2015.

"Many satellite operators in the communications industry have continued to defer new satellite construction awards to evaluate geostationary and other competing satellite system architectures and other market factors," Maxar continued.

Howard Lance, Maxar's chief executive, said in a call with analysts this morning the company's "primary path" is to sell the business.

"We're still hopeful to have an answer that we can announce between now and the end of the year," he said.

Meanwhile, Maxar said sales in its most recent quarter hit $508 million, up from $337 million in the same three-month period a year earlier. The company attributed the sales gains to its acquisition of DigitalGlobe.

Maxar said it recorded a $432.5 million loss in the quarter, down from $12.3 million in profit the prior year.

The company's space systems segment reported sales of $263 million, down from $298 million the prior year.

"The decrease in revenue is primarily due to a significant increase in estimated costs to complete programs as a result of supplier performance issues and delays experienced during the third quarter of 2018, as well as unanticipated impacts of lower volume in our Palo Alto factory, which resulted in higher overhead burden on existing programs and reduced labor productivity," Maxar said.

199925