Orbital Sciences Corp. [ORB] yesterday reported lower net income in its fourth quarter despite record sales but lowered its sales and earnings guidance for 2013 due to an uncertain federal spending outlook given the looming budget sequester as well as timing of awards.
Net income tumbled 20 percent to $13.9 million, 23 cents earnings per share (EPS), from $17.4 million (29 cents EPS) a year ago, as results were impacted by more than $10 million in pre-tax debt retirement charges. The results nipped consensus estimates by a penny.
Excluding the debt retirement charge and a tax benefit a year ago, adjusted net income rose 7 percent to $17.4 million (29 cents EPS).
Sales in the quarter increased 6 percent to $354.6 million from $335.5 million a year ago, driven by growth in the company’s Launch Vehicles, and Satellite and Space Systems segments. Orbital said the higher sales were boosted by gains in target vehicles, the Antares rocket program, and increased activity on science and remote sensing satellite contracts.
For 2012 net income fell 9 percent to $61 million ($1.02 EPS) from $67.4 million ($1.13 EPS) in 2011 as results were hampered by the debt retirement charge. Excluding the charge and tax benefits accrued in 2011, adjusted net income jumped 18 percent to $64.5 million ($1.08 EPS) from $54.6 million (92 cents EPS). Free cash flow for the year was a $34.3 million outflow.
Sales for the year were a record $1.4 billion, 7 percent higher than $1.3 billion recorded in 2011.
Due to the uncertain outlook and award delays, Orbital lowered its sales guidance for 2013 to between $1.4 billion and $1.5 billion from earlier projections of $1.5 billion. Guidance for net income was lowered a nickel on the high end of the range to between $1 and $1.10 EPS. Free cash flow is expected to range between none and $20 million.