Orbital Stock Takes a Serious Tumble as Company Seeks to Reassure Investors

Orbital Sciences stock took a major nose dive today following the failure of the company’s Antares launch vehicle last night. The stock is down more than 15 percent today.

Orbital officials held a conference call with investors and analysts earlier today. [Transcript] David  W.  Thompson,  CEO and chairman, and Garrett  E.  Pierce,  CFO and vice  chairman, spoke during the call. Below is a summary of the major points they made:

  • a lot of data on launch, don’t expect a problem in determining what went wrong
  • expects to zero in on the cause of the accident over the coming days
  • could take longer to determine the root cause
  • cautioned against drawing early conclusions, sometimes early guesses they are wrong
  • launch complex spared any major damage
  • Orbital carried insurance that will cover contract revenue on flight and repairs to launch complex
  • company has “ample and conservative” management reserves for the recovery period
  • next Antares/Cygnus launch was scheduled for early April
  • expects a delay of three months but hopefully not more than one year — too early to tell at this stage
  • company has amply supply of AJ-26 engines to cover remaining launches to the International Space Station under the Commercial Resupply Services (CRS) contract with NASA
  • about two years away from flying Antares launch vehicle with a new first-stage engine
  • company could accelerate that change over if AJ-26 engine is identified as cause of the accident
  • will make a decision in November as to what to do about the engine change
  • hinted at possible other options other than accelerating the engine change but would not elaborate
  • still on track to submit a proposal for the CRS-2 contract in a few weeks
  • flights under CRS-1 extension agreement and CRS-2 proposal would be done with a new first-stage engine
  • do not expect the failure to affect planned merger with ATK
  • too early to tell whether early December vote on ATK merger will be delayed.