2 out of 5 industrial stocks are at record highs. Here’s our post-earnings outlook on all of them

Eaton Corporation signage at the NYSE

Source: NYSE

Earnings season was not perfect for our industrial-focused portfolio companies, but we’re feeling pretty good about their prospects for the rest of the year.

Source link

#industrial #stocks #record #highs #Heres #postearnings #outlook

Space Force raises the stakes as rocket companies compete for lucrative military missions

A Falcon Heavy rocket launches the USSF-67 mission on January 15, 2023 from NASA’s Kennedy Space Center in Florida.


The U.S. military is raising the stakes — and widening the field — on a high-profile competition for Space Force mission contracts.

The Space Force plans to buy even more rocket launches from companies in the coming years than previously expected, granting more companies a chance at securing billions in potential contracts.

related investing news


“This is a huge deal,” Col. Doug Pentecost, the deputy program executive officer of the U.S. Space Force’s Space Systems Command, told reporters during a briefing this week.

Earlier this year the Space Force kicked off the process to buy five years’ worth of launches, under a lucrative program known as National Security Space Launch (NSSL) Phase 3. Now it’s boosting the scale.

The U.S. sees a rising impetus to improve its military capabilities in space, spurring the need to almost triple the number of launches in Phase 3 that it bought in Phase 2 in 2020.

“That just blows my mind,” Pentecost said. “We had only estimated 36 missions in Phase 2. For Phase 3, we’re estimating 90 missions.”

Sign up here to receive weekly editions of CNBC’s Investing in Space newsletter.

In February, Space Force outlined a “mutual fund” strategy to buying launches from companies. It split NSSL Phase 3 into two groups. Lane 1 is the new approach, with lower requirements and a more flexible bidding process that allows companies to compete as rockets debut over the coming years. Lane 2 represents the existing approach, with the Space Force planning to select a set number of companies for missions that meet the most demanding requirements.

Pentecost said Space Force hosted an industry day in February to go over the program’s details and had 22 companies show up. Since then, Space Force made a number of adjustments to Phase 3. It has added more missions, introduced a price cap, expanded Lane 2, and has set an annual schedule for mission assignments.

The government weighs bids by a company’s “Total Evaluated Price” per launch. That’s split into “Launch Service,” meaning how much it costs to build and launch a rocket, and the “Launch Service Support,” which covers special requirements the military may have for launch. The Launch Service Support amount is capped at $100 million per year per company.

“We implemented some cost-constraining tools so that we don’t balloon. We don’t want [a situation where] everybody gets a mission — you get a mission, you get a mission, you get a mission — because then there’s no real competition,” Pentecost said.

“We do think that all of our industry partners want to be the number one guy, so we think that will provide competitive pricing to keep our costs down,” Pentecost added.

Widening Lane 2

While Lane 1 is expected to draw the largest number of bids and award 30 missions, Lane 2 is the big show.

With Lane 2, Space Force gives out the most valuable contracts to launch national security satellites with the highest stakes. 

“These are the ones that are a $1 billion [satellite] payload going to unique orbits,” Pentecost said.

Not only has Lane 2 seen an increase in how many missions are up for grabs — currently estimated at 58 launches, up from 39 in February — but Space Force also made the decision to expand the available slots for eventual awards to three companies, instead of limiting it to two.

Elon Musk’s SpaceX and United Launch Alliance, the joint venture of Boeing and Lockheed Martin, were assumed to be the two leading contenders for Lane 2, but now there’s a door open for another company like Jeff Bezos’ Blue Origin.

Space Force will assign 60% and 40% of 51 missions to the top two bidders, respectively, and the remaining seven launches will go to the third-place bidder. 

Regardless of where a company ranks, it must demonstrate that it can meet all the Lane 2 requirements, which include having launch sites on both the east coast and west coast, and the ability to hit nine “reference” orbits with high accuracy several of which are much further from Earth than the low Earth orbit requirement of Lane 1.

Asked by CNBC how many companies are developing rockets that can meet those requirements by the deadline for launches, a Space Force spokesperson declined to specify, saying the military is “tracking several” that are “expanding their launch capabilities into most of these orbits.”

“We’re hoping that it’s not just ULA, SpaceX and Blue Origin competing for that, as there are others who have messaged interest in the past,” Col. Chad Melone, the chief of Space Systems Command’s Launch Procurement and Integration division, said during the briefing.

Securing supply

Space Force is introducing an annual Oct. 1 deadline for assigning missions to companies that have won a contract.

Pentecost explained the first assignments are up for grabs in October 2025, but noted contracts don’t guarantee assignments, which protects Space Force from delays companies may have in developing and flying rockets.

“You could actually have won the contract, that you’ve got this great plan on how you’re going to be flying by [fiscal year] 2027. But since you’re not flying yet, and I have a satellite that needs to fly in two years, we will not give you that mission — we will move it to the other guy,” Pentecost said.

Space Force aims to finalize its request for bidders by September and then have all the proposals in by December, to then award the contracts in October 2024.

Space Force officials said a big driver of that push is to “guarantee capacity,” as there are “a ton of other companies” trying to buy launches for satellites and Space Force needs to lock down its orders.

“We wanted to make sure that we essentially hedged against the launch scarcity that could happen because, if there’s a very large demand for launch and everyone is [buying], prices could be very high,” Melone said.

But despite that fear, Pentecost said 2026 “seems to be the sweet spot” when a number of companies’ rockets will be done with development and ready to fly. And companies that stay on track will have the upper hand in NSSL Phase 3.

“If you’re flying before that, or if your schedule is showing that you’re going to be flying before that, you will get significant strengths, which will put you in a better position to win the best provider or second best in this competition,” Pentecost said.

Why Starship is indispensable for the future of SpaceX

Source link

#Space #Force #raises #stakes #rocket #companies #compete #lucrative #military #missions

Amazon shows off new satellite internet antennas as it takes on SpaceX’s Starlink

The company’s “standard” customer terminal, the middle of the trio of Project Kuiper satellite antennas at under 11 inches square and weighing under five pounds.


WASHINGTON — Amazon revealed a trio of satellite antennas on Tuesday, as the company prepares to take on SpaceX’s Starlink with its own Project Kuiper internet network.

The tech giant said the “standard” version of the satellite antenna, also known as a customer terminal, is expected to cost Amazon less than $400 each to produce.

“Every technology and business decision we’ve had has centered on what will deliver the best experience for different customers around the world, and our range of customer terminals reflect those choices,” Rajeev Badyal, Amazon vice president of technology for Project Kuiper, said in a statement.

Sign up here to receive weekly editions of CNBC’s Investing in Space newsletter.

Project Kuiper is Amazon’s plan to build a network of 3,236 satellites in low Earth orbit, to provide high-speed internet to anywhere in the world. The Federal Communications Commission in 2020 authorized Amazon’s system, in which the company has said it will “invest more than $10 billion” to build.

The Kuiper antennas

The “ultra-compact” version of the Project Kuiper


The “standard” design measures under 11 inches square and 1 inch thick, and weighs under 5 pounds. Amazon says the device will deliver speeds to customers of “up to 400 megabits per second (Mbps).”

An “ultra-compact” model, which Amazon says is its smallest and most affordable, is a 7-inch square design that weighs about 1 pound and will offer speeds up to 100 Mbps. In additional to residential customers, Amazon plans to offer the antenna to government and enterprise customers for services like “ground mobility and internet of things.”

Amazon Senior Vice President of Devices and Services Dave Limp declined to say how much it costs to make each ultra-compact antenna, but told CNBC that it is “materially less” expensive to make than the standard model.

Its largest “pro” model, at 19 inches by 30 inches, represents a high-bandwidth version for more demanding customers. Amazon says this antenna will be able to “deliver speeds up to 1 gigabit per second (Gbps)” via space. Badyal told CNBC there are a variety of enterprise and government applications for the pro series, such as “oil rigs in the middle of the ocean” or “ships that want lots of bandwidth,” such as military vessels.

The company’s “Pro” customer terminal, the largest of the trio of Project Kuiper satellite antennas at 19 inches by 30 inches.


Amazon has yet to say what it expects the monthly service cost for Project Kuiper customers will be.

In showing early customers its antennas, Limp said he’s seen them get “excited” about the lineup.

“They’re surprised by the price points, surprised at the performance for the size, and [the antennas] are solid state so there’s no motors,” Limp told CNBC.

Amazon said it expects to begin mass-producing commercial satellites by the end of this year. Limp told CNBC that once Amazon’s manufacturing facility is fully built, the company expects to manufacture up to “three to five satellites per day at scale.”

“We’ll ramp up to that volume,” Limp said.

Amazon’s demand for rocket launches

The company’s first two prototype satellites are scheduled to launch on the debut mission of United Launch Alliance’s Vulcan rocket, set for May.

Badyal told CNBC that Amazon expects to make “minor tweaks” from the prototypes to the commercial version, as the satellites are “almost identical” but represent the first time much of the company’s hardware has flown in space.

The company’s prototype Project Kuiper satellites shipping for launch.


While Amazon has yet to show off its satellites, or reveal many details, Limp noted that the Kuiper spacecraft are “larger mass” than the first generation of SpaceX’s Starlink satellites, with Amazon aiming for “Goldilocks-sizing.” And Amazon expects the performance of its Kuiper satellites to “outperform them significantly” when compared to Starlink, with expected performance of processing up to 1 terabit per second (Tbps) of traffic. The satellites are expected to have a lifespan in space of about seven years, before they need to be replaced.

Launches of production satellites are scheduled to begin in the first half of 2024, with initial service slated for once the company has a few hundred satellites in orbit, Limp noted.

Last year, Amazon announced the biggest corporate rocket deal in the industry’s history, and has booked 77 launches – deals that included options for more when needed – from a variety of companies to deploy the satellites fast enough to meet regulatory requirements.

Limp said that those launches mean Amazon has “enough to get the vast majority of the constellation up” in space.

“I don’t think you’re ever done thinking about launch capacity, but we feel pretty good about what we have on the order books,” Limp added. “If new vehicles come online, that are more competitive, we’re going to look at it.”

Notably, Amazon has not purchased launches from SpaceX, the most active U.S. rocket launcher. Instead, Amazon has tapped a variety of competitors, purchasing rides largely on rockets that have yet to debut.

“I don’t have any religious issue not to buy capacity from SpaceX, they’re a very reliable rocket, but the Falcon 9 economically wasn’t the best rocket for us,” Limp explained.

Asked whether Amazon would consider owning a rocket system to support its launches, Limp said, “I would never say never to a question like that” but that the company looks for acquisitions in areas “where you can have something that’s differentiated and it’s something where it’s not well-served.”

Limp noted that it’s a different scenario than something like “Prime Air,” the company’s cargo airline, as that was a situation in which the company’s forecast for e-commerce growth was higher than transportation providers like FedEx or UPS or USPS believed.

“We were just using a lot of the excess capacity … only then when it stopped becoming well served did we look at it,” Limp said. “There was a shift in it being well-served for our needs. Right now, I don’t see that from a rocket perspective. There is a lot of launch out there.”

Source link

#Amazon #shows #satellite #internet #antennas #takes #SpaceXs #Starlink