DigitalGlobe insists business base solid despite negative reports
By Andrea Shalal
WASHINGTON (Reuters) - U.S. satellite imagery provider DigitalGlobe Inc (DGI.N: Quote) on Friday pushed back against analyst reports that drove its shares to three-year lows, and said a new U.S. government contract worth "tens of millions of dollars" would keep its business base solid.
Walter Scott, founder and chief technical officer of the Westminster, Colorado-based firm, told Reuters that reports by Benchmark and JP Morgan overplayed the impact of new entrants into the satellite market, and ignored the fact that the company provided the highest-quality commercial imagery available.
"The reports failed to recognize the unique characteristics of what DigitalGlobe provides for the U.S. government that are so far outside of what any of the emerging constellations are capable of. It's ignoring the details," Scott said.
DigitalGlobe shares closed down nearly 4 percent or $0.74 at a new 52-week low of $18.26 on the New York Stock Exchange on Friday, the lowest level in over three years.
The company's shares came under pressure after JP Morgan downgraded the stock to neutral from overweight, saying its future growth prospects were "increasingly at risk," and Benchmark Co cut its target for the company's stock to $20.
The reports came the same day that DigitalGlobe said it had signed a new year-long contract to continue providing unclassified, shareable, high-resolution imagery to the U.S. National Geospatial-Intelligence Agency.
Company officials told Reuters the contract was worth "tens of millions of dollars" but declined to elaborate further.
Scott said emerging new microsatellite operators would generate data that was complementary, but the resolution, quality and accuracy of those products could not compete with DigitalGlobe's "best-in-class" imagery. Continued...