GeoEye-1 Launched Successfully

Up, up and away!

GeoEye-1 launched successfully Saturday, September 6, 2008 from Vandenberg Air Force Base [VAFB], at about 11:51 A.M. Pacific time.

GeoEye’s ground station in Norway relayed the downlink signal it received from GeoEye-1 confirming that the satellite successfully separated from the second stage of the launch vehicle and began automatically initializing its onboard systems.

The launch of GeoEye-1 marks the 83rd consecutive successful launch of the Delta II rocket.

I must admit that watching the launch was one of the coolest things I’ve ever seen because of the vested interest that I had in the launch, and actually wanting it to succeed.

GeoEye-1 on Delta II Rocket Booster

It was a little nerve-racking watching the Delta II rocket jettison different parts after they were used up, and thinking to myself: “was that supposed to happen?”

You can see a full replay of the launch here:

http://launch.geoeye.com/LaunchSite/

There is only video for the first 5 min. or so, and then it crosses over to a real-time simulation that shows what’s going on with the satellite and 2nd stage booster that we can’t see, to give us an idea of what’s going on.

GeoEye, Inc. (NASDAQ: GEOY) 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, insurance and others.

GeoEye-1 Launch a Success!

So now what?

GeoEye-1

Well, now we wait.

GeoEye will begin the process of activating and testing the satellite to make sure it’s intact, nothing was damaged, and that it is working as it should.

This process can take anywhere from 45-60 days as GeoEye has to put GeoEye-1 through its paces and make sure that it works for every single applicable stress test and imagery test.

The reason that it takes so long is because not only does GeoEye have to verify that the satellite is working properly on multiple fronts over many test cycles, but more so because the National Geospatial-Intelligence Agency [NGA] has to then certify the imagery.

This means making sure that the imagery is usable, consistent, and meets the criteria set forth by the NGA for official government usage.

GeoEye then expects to be able to offer imagery and products to customers in the mid- to late-October timeframe, and that includes Google (NASDAQ: GOOG).

Bottom Line

Step 1 complete, now on to Step 2

For the next month and a half or so, we’ll have to hope that the GeoEye-1 satellite is functioning as it should, has no problems, and checks out fine with the NGA.

To be honest though, the hard part is now over with, and we can breath a slight sigh of relief that GeoEye-1 is now hurtling around the Earth at four-and-a-half miles (seven kilometers) per second, and will be making 15 earth orbits per day.

Remember also that GeoEye-1 will have the highest resolution of any commercial imaging system, 0.41-meters or 16 inches for panchromatic (black and white) imagery and multispectral (color) imagery at 1.65-meter resolution.

The highest resolution is the equivalent of being able to see home plate on a baseball field from space.

Together, GeoEye’s IKONOS and GeoEye-1 satellites can collect almost one million square kilometers of imagery per day and provide GeoEye with a “constellation” of multiple satellites that are of a high resolution variety which further enhances GeoEye’s imagery capacity.

Now we just have to wait for the final verification that GeoEye-1 will be a success, and our investing thesis on GeoEye the stock, will play out just as we thought with huge increases in revenue, profit, and cash flow towards the end of 2008, and for the full year of 2009.

With this launch GeoEye is now the leader in the field over rival DigitalGlobe (NYSE: DGI), and has already secured an exclusive contract with Google for the use of GeoEye-1’s imagery.

The hard part’s over, now we just have to wait for GeoEye to continue to execute, and make sure nothing goes wrong with GeoEye-1.

• If you are interested in learning more about the launch and seeing a replay of the launch of GeoEye-1, you can do so here:

http://launch.geoeye.com

New to the GeoEye story?

Click here to read my complete GeoEye research report

• Read my initial buy recommendation here.
• or listen to my EXCLUSIVE interview with GeoEye’s management team here.

Comments

[Mr G:]

I watched the launch also. It was more exciting than college football! I too have a vested interest. I may add to my position Monday if Mr. Market does not get too excited. Again, thanks for the recommendation!

2008 Sep 06 06:47 PM

[Chris Ferna...:]

Mr. G,

Yea, it was pretty exciting, sort of surreal in a sense, especially thinking about how they are able to pinpoint exactly where they are going to enter a certain space, etc.

I had a good time watching it, even if I was a little bit nervous!

Let's hope the satellite checks out, and works as it should, and if it does, then it's full steam ahead for GeoEye.

Chris

2008 Sep 07 05:00 AM

[hermanbrut:]

Agree with Chris. The launch was the big headlines. Final certification and first images sold, when these events happen, may not even make the news. Even though the launch was actually a low risk event, I think many people over-exaggerated the chance of failure due to the mental images we all have of rockets blowing up on the launch pad.

With stocks in today's market it's important to look at possible downside.
Between now and final certification, what might happen to GeoEye to cause the company to lose value?

• The satellite isn't going to fall out of orbit.
• Past accounting problems are now resolved.
• Likely there will be little negative news during the certification process.
• The demand for shares by those who have shorted to hedge their bet on the launch may cause price to rise rapidly over the next month.
• Looking ahead, revenues are expected to grow quickly.
• Any adverse geo-political events will only make GeoEye's services more valuable.

So for the next month or two, I see virtually no chance for GeoEye to lose value.
What's not to like? I think it makes no sense to sell shares now.

2008 Sep 07 09:13 AM

[NOWHEREMAN:]

The time to worry is when nothing can go wrong.

I have a Conspiracy theory. There will not be a "certification". Everything will go as planned, function perfectly but by that time the Military will have personal uses for this and other Satelites. National interests will supercede commercial ones.

So I would wait until they have received the go ahead. If it has the potential you envision, missing a few points won't matter in the long run.

GEOY, will take a look, thank you.

2008 Sep 07 09:44 AM

[maelstrom:]

Chris great commentary as usual. Thank you for your time and effort to help keep us informed

2008 Sep 07 11:42 AM