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Technology Stocks : Orbital science (ORB) -- Ignore unavailable to you. Want to Upgrade?

To: Fred Levine who wrote (2183)	7/29/1999 10:00:00 PM
From: Dave Baker	Respond to of 2394

I expect earnings to grow exponentially from this point on. We've seen the last of the low 20s, IMHO.

To: Fred Levine who wrote (2183)	7/29/1999 10:39:00 PM
From: RP Svoboda	Read Replies (1) \| Respond to of 2394

Fred, I listened to the conference call and liked most of what I heard. They seemed pretty confident that they would be able to execute their Orbcomm time-line and reach cash break-even by mid 2000. They need to increase installation rate 3X each quarter to meet their 50% goal by the end of the year. Their goal is a 750K unit total with a 60-80% installed rate by end of year 2000. Their execution is starting to be helped by other companies installing their equipment as OEM (Wabash). Right now they have locked in or are in negotiations to lock in 7 of the top 10 trucking companies. Their GE Capital and Qualcomm deals will help their push into the next 50 biggest companies. From there, ORB hopes to be the defacto standard for wide area communications. They will then be able to push into the entire market in the US and expand overseas. Orbimage has some delays but the funding to complete its 5 sat business plan is in place. Unlike Orbcomm, each image sat will start to pay for itself as soon as it is operational. In other words, it should not bleed cash as long as comm has. Orbnav's second generation system should be accreditive to earnings by Q3. Hertz will start an advertising campaign early sept. During the discussion on margins, they stated that the small GEO margins will suffer for the next two years until they get more established in the market. Will someone please explain to me why ORB is even trying to carve into this market? Smaller, faster, cheaper birds are the key to the LEO market because essentially space is unlimited. However, there are a limited number of GEO slots. The writing is on the wall that people / countries want to maximize their limited slots by filling them with huge (do it all) sats. Sure there are a few exceptions where some will want a small GEO, but are these exceptions worth the time, effort, and slashed profit margins required to gain a toe-hold in the market? I am keeping my price target in the mid to high $50s for the middle of next year. Once Orbcomm breaks even, the market will view this company very differently. Orb mentioned that based on an average usage rate, the system could support about 15 million subscribers. If you figure that it takes about 330K subscribers to pay for the original system, then about 100K subscribers a year to pay for the running of the system - that leaves a lot of pure profit after next year. Thanks. Boda