Earnings season is a funny time of year. Investors would probably prefer -- generally speaking -- to have their companies report one at a time, so that each earnings report can get the attention it deserves. But the more usual practice is for companies in an industry to report as a group -- all shouting out their earnings at once in a cavalcade of numbers.
And that's what space investors are experiencing today.
Space infrastructure company Redwire (RDW), spy satellite operator BlackSky Technology (BKSY 0.75%), and satellite builder Maxar Technologies (MAXR) all reported earnings today, to various reactions from investors. As of 10:30 a.m. ET, Redwire stock is up 3.4%, BlackSky is gaining 10%, and Maxar is ... down 9.9%.
And for no particular reason, space tourism pioneer Virgin Galactic (SPCE -17.52%) -- which didn't report earnings or indeed any other really big news today, but which has high visibility among space investors -- is moving as well, up 2.4%.
So how did these companies do with their earnings today? Well, it was a bit of a mixed bag, but let's take them one at a time.
Redwire reported 14% year-over-year sales growth for its fiscal second-quarter 2022 -- $36.7 million in total revenue. The company also booked 68% more new contracts than it executed old contracts, so revenue seems certain to accelerate in future quarters and years. Redwire didn't even come close to earning a profit, losing $77.4 million ($1.22 per share) instead, but management noted that $80.5 million of that was due to "non-cash goodwill, intangible and long-lived asset impairment" charges.
BlackSky's news was even better (along with its stock price). A smaller operation, the company saw sales of just $15.1 million for the quarter, but that was more than double what BlackSky collected a year ago. Sales were helped especially by the company's winning a $1 billion National Reconnaissance Office contract in May. Granted, BlackSky isn't profitable, either, but it lost only $26.3 million for the quarter, so a bit less than Redwire.
Finally, the big surprise today was Maxar. Instead of earning $0.13 per share, as analysts had forecast, Maxar reported a big $0.41-per-share net loss for Q2 2022. Its quarterly sales of $438 million also fell short of analyst targets ($455 million), resulting in a top- and bottom-line loss for the veteran space stock. That probably explains why investors -- who seem to be buying up every other stock that's space-related today -- are selling Maxar shares instead.
But does that make sense?
While I certainly understand space investors' enthusiasm for the rapid revenue growth rates we're seeing at Redwire and BlackSky, both of these companies are growing their revenues off of vanishingly small bases and their growth could well slow down as the businesses mature. It's also worth emphasizing that, despite all the growth, neither is yet profitable. Analysts forecast that Redwire will become profitable in 2024, and BlackSky in 2025 -- but how accurate those forecasts are remains to be seen.
In contrast, Maxar is already a mature business and already proven to be viable. Despite its Q2 losses, analysts still think Maxar will be profitable this year. More than that, they're predicting profits will more than triple next year to $1.71 per share -- valuing the company at only 15 times forward earnings if those predictions prove correct.
With Wall Street forecasting 31% average annual earnings growth for Maxar over the next five years (according to data from S&P Global Market Intelligence), Maxar just might be the safest bet in space today.