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GeoEye Looks Good Long-Term

Stockpickr Guest Columnist

By Chris Fernandez of PeakStocks.com

The Pentagon and the head of U.S. intelligence signed an agreement on Aug. 15 to buy and jointly manage two imagery satellites, a move that last month John Young, Pentagon acquisition chief, warned was inconsistent with a presidential directive to maximize commercial imagery.

The two commercial satellites would cost about $1.7 billion and would be launched around 2012.

According to a Reuters news report, the satellites, launch vehicles and associated ground-based command and control equipment would be purchased by the National Reconnaissance Office, or NRO, using military intelligence funds.

So what does this mean for GeoEye(GEOY) and its only U.S. rival, DigitalGlobe?

GeoEye provides space-based and aerial imagery and geospatial information through high-resolution and low-resolution imagery, imagery-derived products and image processing services to customers worldwide. This capability benefits a broad array of industries, including national defense and intelligence, online mapping, state and local governments, environmental monitoring and land use management, oil and gas, utilities, disaster management and insurance.

So how will the government's entrance into the commercial satellite imagery space impact this already nascent field?

To read more, please click here.