Virgin Galactic (SPCE) beats estimates in the third-quarter earnings 

SPCE earnings
Virgin Galactic’s space tourism rocket plane SpaceShipTwo returns after a test flight in California on Dec. 13, 2018. Billionaire Richard Branson is partnering with a group of investors to take his space tourism company public

Virgin Galactic (SPCE), the American spaceflight company, released its third-quarter earnings after today’s market closed. In the light of delays, the company beat the estimates as the loss per share was less than the estimates.

  • Revenue: $2.58 million 
  • EPS: -$0.19
  • Net Income: -$68 million
Earning Highlights 
  • Commercial Service on Track for Q4 2022 
  • Strong Ticket Sales at Updated Pricing of $450,000 per Seat 
  • Demonstrates Value of Differentiated Community Experience 
  • Commenced Fleet Enhancement Program to Increase Flight Rate and Extend Vehicle Service Life Ahead of Commercial Launch 
  • GAAP research and development expenses of $36 million, compared to $46 million in the third quarter of 2020. Non-GAAP research and development expenses of $31 million in the third quarter of 2021, compared to $41 million in the third quarter of 2020.
  • Adjusted EBITDA totaled $(68) million, compared to $(66) million in the third quarter of 2020.
  • Net loss of $48 million, compared to a $92 million net loss in the third quarter of 2020.
  • Cash paid for capital expenditures totaled $1 million, compared to $4 million in the third quarter of 2020.
CEOs Statement 

“We are entering our fleet enhancement period with a clear roadmap for increasing the durability, reliability and predictability of our vehicles in preparation for commercial service next year,” said Michael Colglazier, Chief Executive Officer of Virgin Galactic. “Demand for space travel is strong, and we’ve been selling seats ahead of the pace we had planned. This demonstrates the incredible market for our product and appreciation for the value of the unique experience we offer. It’s a pivotal time for the Company as we transition from a prototyping space innovator to the global, scaled, commercial operation we are becoming.”

Business Highlights:
  • Expected start of private astronaut commercial service on track for Q4 2022.
  • On July 11, 2021, successfully completed first fully crewed spaceflight, Unity 22. The flight fulfilled several test objectives including evaluating the cabin and customer experience. The livestream was watched by tens of millions around the world and brought in tens of thousands of requests for information on future Virgin Galactic spaceflights.
  • In August 2021, opened sales to our Spacefarer community, the group of early hand-raisers who had reserved the right to be first in line for tickets. The Company announced a target of 1,000 reservations prior to the launch of private astronaut commercial service. Approximately 700 of these 1,000 have been sold to date. Current pricing of $450,000 per seat has been well received.
  • On October 14, 2021, announced the beginning of planned vehicle enhancement period. This program will increase vehicle service life and flight-rate capability in preparation for commercial service.
  • In October 2021, the Company entered into a lease agreement for a new design and collaboration center where the next generation vehicles will be designed and engineered.
Analysts Estimates 

The analysts had estimated the Earnings per share for the Company to remain -$0.28 while the revenue was expected at $1.64 million. After the announcements, the Company’s stocks tanked a lot in October. The Company rescheduled its commercial spaceflight from November to mid-2022. 

Earnings History 

Virgin Galactic failed to break the estimate in the previous quarter as the EPS came out at -$0.39 against the estimated earnings of -$0.33 per share. In the third quarter last year, the Company’s earnings per share were at -$0.34 against the $0.26 per share estimates. 

Earnings Forecast 

For the next quarter, the EPS has been estimated to be -$0.28 per share. 

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