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Maxar (MAXR) & EchoStar Amend Agreement Regarding JUPITER 3

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Maxar Technologies and EchoStar Corporation (SATS - Free Report) have amended the agreement for the development of EchoStar XXIV satellite or “JUPITER 3”. The satellite is now expected to launch in the first half of 2023.

It is being manufactured at Maxar's facility in Palo Alto, CA, for EchoStar's Hughes Network Systems division.

The revised agreement widens EchoStar's options in the case of more production delays and make up for prior production delays by offering relief on future payments.

EchoStar plans to tap the growing demand for satellite Internet service by leveraging its flagship product – HughesNet – to meet consumer, aeronautical and enterprise demand for increased bandwidth and connectivity.

JUPITER 3 will almost double the size of the Hughes JUPITER fleet over North and South America by delivering more than 500 Gbps of high-throughput satellite capacity, added EchoStar.

The satellite is currently in the final phase of preparing for dynamics testing. Also, the launch of the dynamic test, last-minute spacecraft performance test and shipment to the launch base are still in progress.

Maxar added that the construction of the JUPITER 3 satellite highlights its advanced manufacturing capabilities and the company is looking to complete the construction per the current schedule.

Maxar is a space technology firm providing satellite imagery and expert intelligence services along with spacecraft and robotics for space exploration, research and national security.

The company continues to expand its partnership with large defense companies to boost its Space Infrastructure segment. Also, increasing contract wins from the U.S. Department of Defense, National Reconnaissance Office and National Geospatial-Intelligence Agency are major tailwinds.

In September, the company announced that it was awarded a $44 million Option Year 3 contract renewal by the U.S. National Geospatial-Intelligence Agency for the Global Enhanced GEOINT Delivery or G-EGD program.

Also, the company’s worldview legion plan is expected to boost satellite launches and provide a long-term revenue stream. The company expects to ship two satellites to the launch site in December 2022 for a launch scheduled for January 2023.

The company recently reported a loss per share of 5 cents in third-quarter 2022 against earnings of 19 cents in the prior-year quarter. The company reported quarterly revenues of $436 million, down 0.2% from the year-ago quarter’s $437 million.

However, the company has tweaked its revenue guidance for 2022 mainly due to weakness in the Earth Intelligence segment. Maxar now expects revenues in the range of $1,755-$1,805 million compared with the earlier guided range of $1,805-$1,855 million.

At present, Maxar has a Zacks Rank #3 (Hold). Shares of the company have lost 22% compared with the sub-industry’s decline of 15.3% in the past year.

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Stocks to Consider

Some better-ranked stocks from the broader technology space are Arista Networks (ANET - Free Report) and Jabil (JBL - Free Report) , each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Arista Networks 2022 earnings is pegged at $4.37 per share, up 8.2% in the past 60 days. The long-term earnings growth rate is anticipated to be 17.5%.

Arista Networks’ earnings beat the Zacks Consensus Estimate in the last four quarters, the average being 12.7%. Shares of ANET have gained 5.1% in the past year.

The Zacks Consensus Estimate for Jabil’s fiscal 2023 earnings is pegged at $8.18 per share, rising 4.1 in the past 60 days. The long-term earnings growth rate is anticipated to be 12%.

Jabil’s earnings beat the Zacks Consensus Estimate in three of the last four quarters, the average being 9.3%. Shares of JBL have jumped 11.2% in the past year.


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