Highest bidder (7/28/23)

Good morning. Happy Friday! We hope everyone has a great weekend.

In today's edition...
💲 Primes report Q2 results
🪧 Space history at auction
💫 Payload’s picks

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The Primes Report Q2 Earnings

It’s not that kind of prime day. Earnings season is in full swing, and today we’re diving into coverage of three primes, including L3Harris’ acquisition of Aerojet Rocketdyne, Boeing’s Starliner drag, and Northrop’s growing space division.

L3Harris 🤝 Aerojet Rocketdyne

$LHX announced it will close its $4.7B Aerojet Rocketdyne acquisition as soon as today.

“We were advised today that the FTC will not block our acquisition of Aerojet Rocketdyne; therefore, we are moving forward to close the transaction on or about July 28,” said L3Harris chief Christopher E. Kubasik.

suThe regulatory green light comes more than a year after the FTC halted a $4.4B sale to Lockheed Martin over monopoly concerns, followed by months of pressure from lawmakers to nix the L3Harris deal as well. Aerojet is a key independent rocket engine manufacturer, specializing in building the SLS RS-25 engines for NASA, plus missile and hypersonic propulsion systems for the Pentagon.

Turning to financials: $LHX revenue increased by 13% YoY in Q2. The company also bumped up its full-year revenue guidance by ~$500M, driven by strong demand and new programs in the space domain.

Despite the strong demand, $LHX traded down ~7% due to narrowing profit margins.

Boeing’s Starliner Losses Pile Up

Boeing ($BA) stock surged Wednesday after its Q2 earnings beat expectations. The one glaring exception? Its space and defense division.

• The division piled up $527M in losses, including $257M attributed to its commercial crew Starliner program.

• The losses stem from Boeing's recent announcement of yet another Starliner launch delay due to issues with its parachute and flammable tape.

Boeing’s Starliner cost overruns have now totaled $1.5B. But, hey, compared to Meta blowing $3.7B on the metaverse in Q2, maybe it's not all that bad. Boeing was mute on when the Starliner will finally ferry astronauts to the ISS.

Moving on to ($NOC)

Northrop’s Q2 sales increased 9% YoY to $9.6B, and the company raised full-year guidance by $400M.

Northrop's space systems was its fastest-growing division, with sales increasing 17% YoY to $3.5B. The division contributed $283M to operating income.

• Space systems includes SLS, SDA sats, and HALO Lunar Gateway contracts.

• The division clocked in $11.3B in funded backlog and $27B of yet-to-be-appropriated backlog.

The company made an unfavorable $36M accounting adjustment to its HALO program, citing an evolving architecture and macroeconomic headwinds.

+ Market reaction: At end of day Thursday, $NOR traded down 2.6%.

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Going Once, Going Twice…Sold

Space enthusiasts bought a slice of history Thursday, shelling out a combined ~$680,000 at Sotheby’s annual space exploration auction.

The online auction sold more than 60 pieces of historical memorabilia, signed photos, and items that had flown to space.

Big ticket: The top seller was an Apollo 13 flight plan signed and inscribed by capsule communicator Jack Lousma, lunar module pilot Fred Haise, and flight director Gene Kranz. The booklet, which Sotheby’s estimated to be worth $3,000-$5,000, sold for a whopping $48,260.  

Lunar fever: Two items each sold for $44,450, tied for the second-highest bid of the auction: a rescue arrow decal that flew to the Moon aboard the Apollo 15 mission and a boost cover release decal that flew on Apollo 11.

There was a three-way tie for third, at a price tag of $30,480:

• A map of the Moon’s Sea of Tranquility signed by astronaut Buzz Aldrin

• An acrylic painting by Apollo 12 astronaut-turned-painter Alan LaVern Bean, which shows Apollo 15 astronaut David Scott drilling on the lunar surface. The painting incorporates tiny pieces of the Apollo 12 spacecraft and was texturized by a geology hammer that Bean used on the Moon.

• A photo of Apollo 13 on the launch pad signed by mission commander Jim Lovell, Haise, and electrical, environmental, and consumables manager Sy Liebergot.

No bids: A copy of the Voyager Golden Record, valued at $400,000-$600,000, was up for sale, but received no bids. The record is the master audio recording that belonged to Carl Sagan and Ann Druyan, who worked on the project to launch a record on the two Voyager missions that included sounds of nature, music throughout history, and greetings in 55 different languages.

See You Next Week!

Payload cofounder Ari Lewis is hosting a webinar with the CMO of Maxar, Colleen Campbell, on Aug. 1.

Colleen has 21+ years of marketing experience working at companies such as Northrop Grumman, Ogilvy, and Finsbury Glover Hering. The conversation will focus on:

• Maxar’s marketing post-acquisition

• In-house vs. agency decision making

• Maxar’s earned media strategy and Maxar News Bureau

Plus much more!

In Other News

• The FAA is creating a committee to consider new commercial human spaceflight safety regulations.

• India's offer to sell its Small Satellite Launch Vehicle has attracted 20 potential bidders.

• Space Perspective has sold 1,600+ tickets for its suborbital space tourism experience.

• Argentina signed on to the Artemis Accords.

• Rocket Lab ($RKLB) unveiled its new Neutron design.

The View from Space

Umbra collected SAR images of Pyongyang, revealing what the company says are North Korean mobile missiles.