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After Declines, ATK Sees Stability for Space Business
PARIS — Rocket-motor and space hardware builder ATK on Feb. 5 said it now sees light at the end of the tunnel at its Aerospace Group after a steep decline following the end of key NASA and U.S. Air Force programs.
“We do believe from everything we can see that we have stabilized that business and that we’re poised for some modest growth over the next few years,” ATK Chief Executive Mark W. DeYoung said in a conference call with investors. “It also appears that margins, at the current program mix, are going to be stable going forward.”
Arlington, Va.-based ATK’s aerospace business has suffered the retirement of the U.S. space shuttle and the cancellation of NASA’s Constellation program and the Ares rocket for which ATK was a contractor. The end of the U.S. Air Force’s program to refuel Minutemen 3 nuclear missiles — work that had generated several hundred million dollars in revenue for ATK — also reduced its revenue.
The Aerospace Group is making do with a NASA contract volume that is far lower than the $500 million annual run rate in the shuttle era. ATK officials have said future NASA work is likely to stabilize at around $300 million a year, depending on the evolution of NASA’s planned heavy-lift Space Launch System, SLS. The company is building solid-rocket motors for the first two scheduled SLS missions in 2017 and 2021, and has a separate contract under NASA’s advanced booster-casing program.
ATK hopes to build its business in producing small satellites for government customers. It is under a relatively small contract to the Air Force to study the ability to host weather-monitoring instruments on a small satellite platform “for customers who are looking for sophisticated, quick-to-market, affordable capabilities,” DeYoung said.
For the three months ending Dec. 30, ATK’s Aerospace Group reported revenue of $301.1 million, flat from the same period a year ago and an early indication that the business has stabilized, DeYoung said. Pretax profit, at $37.5 million, was up 7.6 percent over the same period a year ago.