Space is a star-studded business right now, with the final frontier luring top aerospace companies to beef up their launch businesses so as to cater to satellite customers and more. But if you're looking for a promising stock in the sector to consider buying now, dedicated space-launch company Orbital Sciences (NYSE:OA) is one company flying high in 2013 that could be ready to blast off to even greater heights.

Launching and earning
Orbital's stock has shot up more than 20% year to date after a string of successes, but the stock's risen higher in the past few days after an eventful week so far.

The company reported earnings on Tuesday, and while revenue fell year over year -- and missed analyst expectations -- the falling sales were due primarily to the completion of several satellites under contract. Earnings managed to defy the drop, beating analyst projections handily while rising 50% year over year to $0.33 per share. Margins are on the upswing at all three of Orbital's business segments, but the company will have to pick up its sales in the future to take advantage of them.

Fortunately, Orbital's on pace to do just that. The company's Antares rocket dominated the headlines this week, successfully completing a test launch on Sunday. The midsize rocket defied earlier delays that pushed the launch date back and delivered a mock payload without any problems.

The rocket has another test launch scheduled to occur later in the year, when Orbital hopes to launch its Cygnus spacecraft for docking with the International Space Station. If that goes as planned, the company will then begin to get to work on its $1.9 billion contract with NASA for eight scheduled cargo runs to the space station between this year and 2016.

It's been a slow start for Orbital fraught with delays, but this company's finally getting its feet on solid ground at the right time for investors to capitalize.

What a successful launch means
Sunday's successful launch was huge for this company. Orbital tasted failure just a few years ago with its Taurus XL rocket that cost it a $70 million contract with NASA. The agency sent the contract off instead as part of a $400 million contract to the competing United Launch Alliance, Boeing (NYSE:BA) and Lockheed Martin's (NYSE:LMT) space joint venture that has more than kept pace with Orbital recently.

Orbital's not failing any more, however. Not only will Antares' successful launch (along with a successful docking by the Cygnus later this year) pave the way for the start of the NASA contract operations, but Orbital should also see interest from other launch customers pick up now that it has one major victory on record.

NASA and other bodies now can have confidence in the Antares' capabilities; after all, losing a rocket is costly business, which is a huge negative particularly for government agencies in today's budget cut-dominated environment. Stifel Nicolaus analyst William Loomis outlined Orbital's improving position in an interview with Bloomberg, saying, "As each milestone gets behind them, there's less risk."

The company's plan is to carve out a niche in the midsize satellite market, catering to military and private customers in order to find growth and avoid getting blindsided by cuts at the Defense Department and other government agencies. Orbital's Antares already has a contract with the DoD's Orbital/Suborbital Program-3 contract, and the company's history of providing launch vehicles such as missile interceptors and target vehicles to the DoD should help it continue to vie for future military contracts.

Orbital's stock has jumped on the back of the recent good news, and as long as Cygnus' test docking with the ISS goes well later this year, shares of this company are set to rise higher. No investor should assume that Orbital isn't facing challenges: Plenty of competition exists in the space industry, between Boeing and Lockheed – each of which has grown space-based sales recently, with Lockheed particularly getting a boost from government satellite sales -- to Elon Musk's SpaceX, which is directly competing with Orbital to resupply the ISS and was the first to dock a capsule with the station.

Still, the Antares launch and the company's growing margins have its stock on pace to soar. This year is full of risk for the company -- enough for more cautious investors to justify shying away from buying shares right now -- and much depends on Orbital's success in kicking off operational missions to the space station. If all goes as planned, however, this week's launch will have laid the foundation for a bright future -- and Orbital's investors could be the biggest winners in 2013.

Fool contributor Dan Carroll has no position in any stocks mentioned. The Motley Fool recommends Orbital Sciences and owns shares of Lockheed Martin. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.