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Orbital Sciences Corp. Message Board

  • wright.tom64 wright.tom64 Feb 13, 2014 9:42 PM Flag

    A question for doc or clam or anyone else concerning ORB's operating margin

    A friend of mine who is pretty conservative said he loved ORB's chart and much of what he saw in the statistics but was concerned about the operating margin which he felt did not leave much room for mistakes. Can we view o.m. differently in Orbital than we might in another company or should we be more concerned about this aspect of some otherwise pretty good stats?

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    • Hi Tom. I seem to recall a few meetings ago where they spoke about operating income margins returning to the levels of 2008 . I think they mentioned somewhere in the 8.8 % range as their goal. R&D costs on the Antares has pulled that number down over the past few years. They are essentially done with those costs, except for some small work on Antares upgrade. I see them returning to about 3% of revenues next year , or 40-45 mil, a decline of roughly the same amount and a nice boost to those margins next year.

      Sentiment: Buy

    • What exactly was his concern? I would have to chart the numbers vs some benchmark to see any disturbing trend. But today's Yahoo shows Op Mgn- 8.66%; Profit Mgn- 4.86%; ROE- 8.88% and ROA- 5.94%. Nothing shabby there but in depth work required to look at trend, find good benchmarks and dig out internal issues like writeoffs of R& D involved in Antares & Cygnus, etc. First cut, ORB is highly valued vs run of mill Aerospace stocks and needs to confirm in ongoing revenue growth and profit margins that it has built something special in the space business. Anyone else?

      Sentiment: Buy

      • 1 Reply to clamdigger_97
      • Here is LMT's data per Yahoo: Op Mgn 9.93%; P Mgn 6.57%; ROA 7.52%, ROE 119% ...a little better than ORB's. Revenue growth YOY is -13.7% for ORB and -4.7% for LMT. Again LMT comes off a little better. Not sure if this is a valid comparison or if the numbers are up to date and comparable. Bottom line (IMO) is that ORB needs to really start cranking out good profit and growth numbers for the foreseeable quarters. Elon Musk is racing up behind and LMT is sitting at the top of the mountain. Just my 2 cents. Need to secure more engines for Antares and compete well with Musk for LEO business. (I have no idea where the future space business 'sweet spot' lies.)

        Sentiment: Buy

 
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