See that satellite up there? No, I guess you can't. But Motley Fool Rule Breakers recommendation GeoEye (Nasdaq: GEOY) owns it. Meanwhile, back at Ground Control, the company is all set to announce its third-ever earnings report tomorrow. Will the results clear the horizon?

What analysts say:

  • Buy, sell, or waffle? Exactly one analyst keeps eyes on GeoEye, and rates it a buy.
  • Revenue. Said analyst predicts that quarterly revenue will drop 10% to $33 million ...
  • Earnings. ... while profits fall in tandem, bottoming out at $0.24 per share.

What management says:
GeoEye sightings have been as frequent as UFO appearances these past few months. The stock most recently hit the headlines, though, on news that its chief competitor, DigitalGlobe, is readying for an IPO. Investors liked the news, bidding GeoEye shares up (presumably on expectations that doubling the public competition would double investor interest in both stocks). But from my perspective, DG's advent spells trouble for GeoEye, and increased competition for clients. DG already has Google (Nasdaq: GOOG), Oracle (Nasdaq: ORCL), Microsoft (Nasdaq: MSFT), and Garmin (Nasdaq: GRMN) in its camp, while GeoEye mainly gets its business from government buyers.

In other news, GeoEye confirmed last month that its latest high-tech satellite, Dash-1, has completed final testing and is ready for launch into orbit, just as soon as United Launch Alliance (a joint venture between Boeing (NYSE: BA) and Lockheed Martin (NYSE: LMT)) gets around to it.

What management does:
From a free cash flow perspective, we're watching GeoEye's profitability slowly decay, with each succeeding quarter showing less and less cash generated from operations. (Fortunately, capital expenditures are also falling.) As a result, the company doesn't generate nearly the free cash flow that the GAAP margin numbers you see below might suggest.





























All data courtesy of Capital IQ, a division of Standard & Poor's. Data reflects trailing-12-month performance for the quarters ended in the named months.

One Fool says:
With free cash flow erratic, and analysts predicting a drop in both sales and profits to be announced, what good news can investors hope for? Basically, I suspect, all hopes for a share-price bump sit in one basket right now -- Dash-1. Superior to anything else GeoEye currently has in the sky, the company is counting on this bird to boost its prospects.

With the hoped-for April launch date now come and gone, we're left with a faint, fleeting hope that United Launch Alliance will squeeze Dash-1 in for a June launch. Failing that, we're left with an August date as the backup. The more clarity GeoEye management can impart on when Dash-1 will lift off and begin generating revenue, the better the stock should do tomorrow. And of course, the earlier the date, the better.

Take a gander:

Investing in high-risk, high-reward "flyers" like GeoEye is the name of the game at Motley Fool Rule Breakers. If that's a game you're willing to play, take the service for a spin for free and see what other ideas we have in store. GeoEye is a Rule Breakers pick.

Fool contributor Rich Smith does not own shares of any company named above. Garmin is a Stock Advisor and Global Gains pick. Microsoft is an Inside Value selection. The Motley Fool has a disclosure policy.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.