What happened

Just as it promised (and just hours after it promised), Maxar Technologies (NYSE:MAXR) reported its fiscal third-quarter 2019 earnings last night, right after close of trading. The stock traded down in the after-hours last night, then popped right back up today; as of 1:25 p.m. EST, it's enjoying a healthy 14.5% gain.

But why?

Satellite broadcasting to Earth

"Hey, Houston! Didja hear? Maxar lost money -- and its stock went up anyway!" Image source: Getty Images.

So what

I mean, it's nice to see the stock up and all -- I'm a space fan, and I love it when "space stocks" go up. It's just that this particular space-stock rally doesn't seem to have a lot of logic behind it. Consider that in Q3, Maxar:

  • Missed on earnings, reporting a $0.44-per-share loss instead of the $1.06-per-share profit Wall Street had expected
  • Missed on sales, too, booking $479 million instead of the $560.3 million analysts had predicted
  • And experienced a 6% decline in sales, year over year, to boot

That doesn't seem to me like a lot to build a rally upon.

On the plus side, though, free cash flow was positive, with Maxar generating $19 million in cash profits in the quarter. And debt came down a bit -- both quarter over quarter, and year over year.

Now what

In the press release Maxar management didn't give much in the way of guidance for what to expect next, other than a vague promise to make continued "progress" on "near-term priorities to position Maxar for sustained top and bottom-line growth, including efforts to reduce debt and leverage levels."

In that regard, though, analysts polled by S&P Global Market Intelligence predict that while Maxar will end this year with a profit under generally accepted accounting principles (GAAP), the next two years could be rough, with Maxar losing money on the aforementioned "bottom line" in each of fiscal 2020 and 2021.

Given those predictions, perhaps the best way Maxar investors could play today's rally would be...to take the money and run.