{"id":59258,"date":"2020-08-07T00:11:12","date_gmt":"2020-08-06T16:11:12","guid":{"rendered":"https:\/\/wp-productionenv-bjg9h2g2bgg5b8aa.southeastasia-01.azurewebsites.net\/news\/maxar-stock-surges-on-strong-2q-executives-update-legion-telesat-leo-outlook\/"},"modified":"2020-08-07T00:11:12","modified_gmt":"2020-08-06T16:11:12","slug":"maxar-stock-surges-on-strong-2q-executives-update-legion-telesat-leo-outlook","status":"publish","type":"post","link":"https:\/\/starpath.global\/news\/maxar-stock-surges-on-strong-2q-executives-update-legion-telesat-leo-outlook\/","title":{"rendered":"Maxar Stock Surges on Strong 2Q, Executives Update Legion, Telesat LEO Outlook"},"content":{"rendered":"<\/p>\n

Maxar Technologies<\/strong> stock climbed over the $24 per share mark Thursday morning after posting strong second quarter results and reporting $500 million dollars in liquidity after its April 2020 sale of MDA<\/strong>. Maxar stock value has tripled during the past year, reflecting a remarkable turnaround for a company that continues to remain resilient through a COVID-19-fueled economic crisis.<\/p>\n

The Colorado-based space infrastructure company\u2019s total revenues increased 7% year-over-year during the second quarter, with growth across all company divisions. During the company\u2019s 2Q earnings call, Maxar CFO Biggs Porter said that new contract awards and U.S. government and military program expansions drove growth in its Earth Intelligence (6% year-over-year) and Space Infrastructure (2% year-over-year) divisions \u2014 the latter bouncing back from declines in previous quarters. These gains were slightly offset by lower commercial revenue and bookings due to COVID-19.<\/p>\n

\u201cImportantly, we expect this trend to reverse in the second-half of the year, given recent commercial awards that are beginning to ramp,\u201d said Porter, who added that Maxar\u2019s adjusted consolidated EBITDA margins increased 520 basis points year-over-year, driven by margin expansion in both its operating segments and lower corporate expenses.<\/p>\n

Maxar ended the quarter with a total order backlog of $1.9 billion  (a gain of $300 million from the previous quarter) and a net income of $306 million, which includes after-tax gains on disposal of discontinued operations and from the sale of the MDA business in April. Adjusted EBITDA was $138 million, which is 31.4% percent of its consolidated revenues. This compares to adjusted EBITDA of $108 million and 26.2% from the second quarter of 2019.<\/p>\n

BMO Capital Markets<\/strong> analyst Thanos Moschopoulos praised the company\u2019s 2Q performance and raised the firm\u2019s estimates and target price. \u201c[Maxar\u2019s] Q2 2020 results were significantly above consensus,\u201d said Moschopoulos. \u201cThe outlook for the business has clearly improved, given a better backlog and return to profitability in the Space Infrastructure segment.\u201d<\/p>\n

Maxar President and CEO Dan Jablonsky, who has led the company\u2019s turnaround since taking the top C-suite chair in January 2019, said that strategic operational realignment and debt reduction, combined with resilient demand from end-users have stabilized the company and provided the financial padding needed to navigate a contracting global economy.<\/p>\n

While acknowledging that COVID-19 creates \u201cunknowns\u201d that Maxar will have to deal with, Jablonsky said the company will use its healthy cash supply to invest in future growth opportunities, including those provided by its acquisition of 3D geospatial company Vricon in June.<\/p>\n

\u201cWe\u2019ll make investments in critical technologies, such as the 3D software and intellectual property that Vricon<\/strong> brings to the table to assure that we are in an advanced position to help our customers perform their critical missions,\u201d Jablonsky said to reporters during its conference call. \u201cWe now have an opportunity to expand margins over time, through improved execution in our Space Infrastructure business and via mix, which we believe is likely to favor our data and data analytics businesses. Said another way, there\u2019s some self-help here, as well as some growth-driven margin expansion. We will achieve that both by streamlining our operations, being disciplined with new bookings, and making investments to drive growth.\u201d<\/p>\n

Jablonsky and Biggs also gave updates on the development and launch of Maxar\u2019s upcoming Earth imaging constellation, WorldView Legion, as well as its bid to build Telesat<\/strong>\u2018s LEO constellation.<\/p>\n

Jablonsky said that while he couldn\u2019t rule anything out, he does not expect the company to fully participate in building Telesat\u2019s LEO constellation. Analysts and industry watchers pegged Maxar as a top candidate to build the Canadian operator\u2019s new system.<\/p>\n

\u201cWe\u2019re very happy to help Telesat if their expectations or timing change here. We just don\u2019t want people thinking we were deep in the throes of this and getting ready to announce something in the near-term,\u201d he said during the earnings call. \u201cTelesat has been a longtime customer of ours. We built a lot of GEO satellites for them. If and when they need us, either for that or for the Telesat LEO program as it may morph in the future, we\u2019re very happy to provide services. So it\u2019s potential upside in the future, but I wouldn\u2019t say it is something we\u2019ve modeled into the guidance we\u2019ve given long-term.\u201d<\/p>\n

In regards to its own new constellation, Legion, Biggs said that Maxar expects to start investing more money in the program this year as it progresses to an expected launch in 2021. \u201cThe exact timing of expanding the Legion program this year versus next year can always vary a little bit and we have other discretionary CapEx that we\u2019ll have to watch,\u201d said Biggs. \u201cBut, we do expect next year\u2019s free cash flow to certainly be much better because of the completion of Legion program. Next year could be free cash flow positive \u2026 The Legion program is still progressing, as we expected from an overall budgetary standpoint. We still expect to launch Legion in the first-half of next year.\u201d<\/p>\n

BMO\u2019s Moschopoulos believes that Maxar\u2019s elevated leverage will constrain the company\u2019s stock valuation until the launch of Legion draws nearer and after customers are transitioned off of the existing EnhancedView system. \u201cOur expectation is that the revenue opportunity for Maxar is more likely to increase than to decrease, given Legion, but in the meantime, the transition creates some incremental uncertainty.\u201d<\/p>\n

 <\/p>\n","protected":false},"excerpt":{"rendered":"

Maxar Technologies stock climbed over the $24 per share mark Thursday morning after posting strong second quarter results and reporting $500 million dollars in liquidity after its April 2020 sale of MDA. Maxar stock value has tripled during the past year, reflecting a remarkable turnaround for a company that continues to remain resilient through a […]<\/p>\n","protected":false},"author":1,"featured_media":58695,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"inline_featured_image":false,"footnotes":"","_links_to":"","_links_to_target":""},"categories":[2],"tags":[],"class_list":["post-59258","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news"],"acf":[],"_links":{"self":[{"href":"https:\/\/starpath.global\/blog\/wp-json\/wp\/v2\/posts\/59258"}],"collection":[{"href":"https:\/\/starpath.global\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/starpath.global\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/starpath.global\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/starpath.global\/blog\/wp-json\/wp\/v2\/comments?post=59258"}],"version-history":[{"count":0,"href":"https:\/\/starpath.global\/blog\/wp-json\/wp\/v2\/posts\/59258\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/starpath.global\/blog\/wp-json\/wp\/v2\/media\/58695"}],"wp:attachment":[{"href":"https:\/\/starpath.global\/blog\/wp-json\/wp\/v2\/media?parent=59258"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/starpath.global\/blog\/wp-json\/wp\/v2\/categories?post=59258"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/starpath.global\/blog\/wp-json\/wp\/v2\/tags?post=59258"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}