What's happening: Shares of DigitalGlobe (NYSE:DGI) were down 14% as of 12:50 p.m. Friday after the satellite imagery and geospatial content company released strong second-quarter results, but followed with disappointing guidance.
Quarterly revenue rose 12.8% to $178 million, including 18.4% growth in revenue from the U.S. government to $113.1 million, and a 4.2% gain in diversified commercial revenue to $64.9 million. That translated to adjusted earnings before interest, taxes, depreciation and amortization of $87.7 million, and net income (less preferred stock dividends) of $7 million, or $0.09 per diluted share. Analysts, on average, were anticipating a loss of $0.02 per share on lower revenue of $173.1 million.
"We are pleased with our second quarter results," added DigitalGlobe CEO Jeffrey Tarr, "with revenue growth in line with expectations and better-than-expected adjusted EBITDA and free cash flow."

Why it's happening: However, Tarr also elaborated "While top-line growth may be somewhat moderated in the second half relative to our original expectations, we still expect revenue to grow at a double-digit rate driven by new capacity, new products and new customers."

As such, DigitalGlobe reiterated its 2015 outlook despite its solid second-quarter beat. As it stands, that outlook calls for full-year revenue of $725 million to $750 million, adjusted EBITDA of $355 million to $375 million, and capital expenditures of $110 million. Wall Street's models called for revenue of $735.2 million, or slightly below the midpoint of DigitalGlobe's expected range, and earnings of $0.27 per share.

It seems silly the market would punish DigitalGlobe for maintaining an outlook that's already above analysts' expectations. But to be fair, our market is a forward-looking machine, and investors are likely worried DigitalGlobe's second-half weakness might be a sign of things to come. I'm not convinced that's necessarily the case just yet, but it's no surprise the market is taking a step back from DigitalGlobe stock today.