Business

Virgin Galactic’s losses could grow as operating costs soar


Virgin Galactic Holdings Inc. (SPCE), the world’s first publicly traded space tourism company, likely lost more than $100 million in the fourth quarter as operating costs rose and the company prepared to begin commercial operations.

Pull out key

  • Analysts expect to see lower year-over-year earnings versus higher sales.
  • Investors cheered the test flight of the VMS Eve mother ship in February.
  • Virgin Galactic is about to be commercially ready for its consumer spaceflight.

Virgin Galactic’s net loss for the fourth quarter is likely to grow 72% to $139 million, or 52 cents a share, from $81 million a year ago, according to estimates compiled by Visible Alpha. The company is expected to report revenue of $0.5 million, a 251% increase year-over-year, offset by a 125% increase in research and development expenses ($93 million). la). Virgin Galactic reports results after the market close on February 28.

The company’s growing losses underscore barriers to entry into the high-risk space tourism industry, which has so far been dominated by three billionaire-backed ventures: by Richard Branson Virgin Galactic, Amazon founder Jeff Bezos’ Blue Origin and Tesla founder Elon Musk’s SpaceX. Unlike competitors that have raked in billions of dollars in NASA contracts, Virgin Galactic plans to derive most of its income from selling space flights, a market that is expected to about 20 billion dollars by 2031.

Virgin has burned through nearly $1.5 billion over the past five years in preparation for commercial flights. Following the successful test flight that brought Branson and three Virgin employees to the edge of space in July 2021, the company has begun a “planned improvement program” aboard its flagship spacecraft, the spacecraft. VMS Eve airport and VSS Unity spacecraft. New Year’s Eve VMS returned to the skies for the first time in over a year earlier this month.

Last year, the company began selling $450,000 worth of tickets — including a $150,000 deposit — for 90-minute suborbital flights scheduled for the end of the year. The company says it is on track to start operating those flights in the second quarter of this year. SpaceX recently worth $137 billion in a private fundraising round.

Virgin Galactic shares have rallied this year, helped by optimism that lifted riskier stocks higher in January. Still, the stock is down nearly 43% last year, compared with a 19% drop for the S&P 500 Consumer Discretionary sector.


Source: TradingView.

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Virgin Galactic Key Stats
Estimates for Q4 2022 4th quarter of 2021 Q4 2020
Adjusted earnings per share ($) -0.52 -0.31 -0.35
Revenue ($M) 0.5 0.14 0
Research and development costs ($M) 93.3 41.5 41.5

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