Question-and-Answer Session
Operator
(Operator Instructions) Your first question comes from Gary Liebowitz of Wachovia Securities.
Gary Liebowitz - Wachovia Securities
Garrett, can you just go over your customary score card for the GEO satellite outlook and also if you can comment on whether you’re seeing any indication that the scientific satellite market might present some opportunities in the second half of the year.
David Thompson
We started the year with an outlook across the industry for 20 to 22 new geosynchronous communications satellite orders. We have increased that now by two, so we are currently projecting between 22 and 24 commercial satellite orders in 2008. Through the middle of July, by our count, 14 new GEO satellites have been placed under contract: four of those, roughly 30% have been in the small class that we compete for and Orbital received two of those four orders.
At our level we began the year with a baseline of three new orders with an upside of four, we’ve increased that now to a plan of four orders with an upside of five. We currently have three proposals outstanding; we expect to submit at least one more by the end of the year. Two of the three currently outstanding proposals are with existing customers, while one is with a new customer and we would expect those three proposals and possibly one other to be decided on by customers between now and the end of this year.
With regard to the outlook in the science satellite market my view is that that area will continue to be relatively slow over the next six months from the standpoint of new order potential. On a more positive note, however, taking a medium term look that would include 2009 and maybe the early part of 2010 I continue to expect a bit of a rebound in NASA scientific satellite funding over the next couple of years.
NASA’s requested budget for fiscal year 2009, which begins this fall, included funding for two new relatively small earth science satellites and as many as three new small satellites in other scientific areas, such as astrophysics and solar physics. Recently, in that latter category, NASA has selected for preliminary evaluation six candidates for those three slots and Orbital is the potential satellite builder for three of those six.
So, we continue to hold a strong position as that market area rebounds, as I believe it will over the next couple of years. I think we’ll see a bit of a turn around of our revenue in that product area, but as Garrett noted, for the first half of the year and as I would add for the second half of the year, we expect that science satellite activity will be down in 2008 relative to what we’ve seen over the last couple of years. Hopefully though, if we continue to perform well for NASA and our other science satellite customers, when the funding rebound comes we’ll be able to grow with that.
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