Orbital 1Q Profit Drops 29 Percent

DULLES, Va. (AP) — Orbital Sciences Corp., which makes small rockets and space systems, said Tuesday first-quarter profit dropped 29 percent as increases in research and development expenses offset higher revenue.

The company also cut its full-year profit guidance, and its shares sank in midday trading.

Net income declined to $9.2 million, or 16 cents per share, from $13 million, or 21 cents per share, in the same period last year. Stripping out one-time items, its adjusted profit totaled $9.9 million, or 17 cents per share.

The Dulles, Va., company said revenue rose 4 percent to $295.7 million. Analysts surveyed by Thomson Reuters expected earnings of 17 cents per share, on revenue of $286.7 million.

Operating income fell $8.8 million, or 44 percent, in the quarter, due primarily to a $3.8 million increase in launch vehicle research and development expenses that were not recovered and a $3.5 million loss on two space program contracts because of cost increases, Orbital Sciences said.

Research and development expenses more than doubled to $19 million from $8.2 million, a year earlier.