Maxar Technologies said this week it has opted to retain its geostationary communications satellite business, which last year it said was potentially for sale.
Dan Jablonsky, Maxar's chief executive, told analysts Thursday the company will “continue to operate the geo comsat production line on a much smaller scale.”
“As we went through the process of evaluating strategic alternatives, we found that the value of the business was worth more to us than the indications of interest we received from potential buyers,” he said. “The more we looked at it, it became clear that keeping the business and optimizing the cost structure was the best choice.”
Under the company's plan, Jablonsky said, the business will seek to accelerate growth in new markets, including the U.S. government.
“We plan to further reduce debt by continuing to optimize our industrial footprint for this business, maintaining the right footprint and infrastructure to execute on both backlog and new orders while repositioning to compete fiercely for the next wave of state-of-the-art satellites and constellations,” he added.
Last year, Maxar said it was in active talks with potential buyers after seeing “a step down in total number and dollar value of geostationary communication satellite awards compared to historical averages prior to 2015.”
Maxar said this week sales in its most recent quarter reached $496 million, down 9 percent from the same three-month period a year earlier. The company's quarterly loss totaled $950 million, down from a $55 million profit a year earlier.
For 2018, Maxar reported sales of $2.1 billion, up 31 percent. However, the company reported a loss for the year of $1.3 billion.
Maxar primarily attributed the loss to an $883 million charge related to its decline in market value; the loss of its WorldView-4 satellite, which failed early this year; and a continued weak geostationary communications satellite market.
Maxar said it has implemented an organizational restructuring that will save $60 million to $70 million a year.