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While the large defense industrials are reporting flat revenue and earnings, some of the smaller, more specialized defense contractors are doing better. These companies may be getting ready for some movement on their stock price that might make them worth a look. One of these companies is Orbital Sciences (NYSE:ORB).

Orbital Sciences primarily makes rockets for space launch missions and target systems. They service primarily the U.S. military and the National Aeronautics and Space Administration (NASA) market although they do perform some commercial launches as well. Orbital offers the unique Pegasus launch vehicle which is carried under the wing of an aircraft to altitude and then launched alongside their more traditional systems. The design of the Pegasus launch reduces costs and provides flexibility in launch site location.

Orbital just reported their fourth quarter results and net income came in at 29 cents a share which was well over the consensus 20 cents. Revenue was down slightly at $22 million quarter-to-quarter which is similar to many other contractors recently reporting. These have through cost control been able to increase earnings despite flat or declining revenue.

In FY2011 Orbital had record revenue at $1.346 billion. This was an increase of $51 million from 2010. Much of this was driven by their Advance Space Programs segment which saw growth in national security satellite contracts.

The company's stock has traded in the $12 to $20 range for most of the last three years since it reached a high of close to $30 in late 2008. The company does not pay a dividend and the lack of movement in the price has done little to entice people to the stock.

This may chance in the upcoming months as Orbital expects to begin launching the Antares vehicle under a contract with NASA to re-supply the International Space Station (ISS). With the end of the Space Shuttle program NASA is now reliant on the Russians along with two commercial contracts to provide these services. Both Orbital and Space X, who have the contracts, have experienced delays but expect to do test launches this summer and then a supply mission before the end of 2012.

Some technical analysis has shown that Orbital may increase substantially this year. It may be better that the Antares system begins entering service this year. The gap that NASA faces while it develops its own launch vehicles is going to allow Orbital and Space X to potentially get more business beyond the ISS supply contract which could increase revenue a decent amount beyond current projections.

The stock has yet to make a breakthrough to even return to its 2009 levels. The financials are getting better and the NASA contract may be what it needs. At the same time there is a chance that the current trends will continue and the price will remain in the same range as it has consistently traded in for the last 12 months.

The company is predicting FY2012 revenues that should be slightly above 2011. With the latest earnings these estimates were adjusted down $25 million. Despite this there is a great deal of potential for the company and its business segments and ultimately its stock price.

Source: Is NASA Contractor Orbital Sciences Set To Take Off In 2012?