SPCE Stock Earnings Mixed As Virgin Galactic Relaunches Ticket Sales

Virgin Galactic (SPCE) reported mixed fourth-quarter results Tuesday after relaunching ticket sales earlier this month. SPCE stock rose late.

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Estimates: FactSet analysts see a loss of 35 cents per share vs. a loss of 31 cents per share in the year-ago quarter. Revenue is seen rising to $300,000 from $0.

Results: A loss of 32 cents per share on revenue of $141,000.

Stock: Shares rose 3.7% to 8.11 in late trading on the stock market today.

Ticket Sales Reopen

The commercial space company reopened ticket sales to the general public on Feb. 16. Sales had been closed since October after they were briefly opened following founder Richard Branson’s flight in July.

“We plan to have our first 1,000 customers on board at the start of commercial service later this year, providing an incredibly strong foundation as we begin regular operations and scale our fleet,” CEO Michael Colglazier said in the announcement.

Ticket prices start at $450,000 per seat, above the previous price point of $250,000. It is unknown what rival Blue Origin is charging space passengers for their flights.

With the reopening of ticket sales, analysts would like to see an updated detailed flight schedule.

“I think the biggest news that investors are hoping for is to find out the schedule of space tourism launches,” said Andrew Chanin, CEO of ProcureAM, which launched the Procure Space ETF (UFO).

Virgin Galactic said Tuesday that its expected launch of private astronaut commercial service remains on track for Q4 2022.

It had previously targeted late Q3 to start commercial service, but delays have mounted as Virgin Galactic looks to upgrade its spacecraft.

The company has about 250 seats remaining as part of its future astronaut program, which includes 1,000 seats. It expects to have the rest of the seats filled by the time commercial service starts later this year. But officials wouldn’t say if all 1,000 future astronauts would fly before its Delta class spacecraft enters service.

Cash Flow Concerns For SPCE Stock

The company expects Q1 free cash flow to be a loss of $75 million to $85 million. It currently has $931 million in cash on hand.

Virgin Galactic said earlier that the ramp-up of Delta class spacecraft will determine when the company becomes cash flow positive. And Virgin Galactic doesn’t see the Delta class spacecraft starting research flights until 2025 and won’t enter commercial service until 2026.

That’s later than some analysts were projecting. UBS analysts wrote in September that they expected the ship to enter service in 2024.

Delta class vehicles are effectively the same as class III vehicles, but will be manufactured in parallel, in order to increase production.

The company is also working on upgrading its VMS Eve mothership and VSS Unity spaceplane. The program is on track to be completed in Q3 2022.

Colglazier said during the earnings call that it sees VSS Unity flying monthly following its commercial launch and class III VSS Imagine flying twice a month.

SPACs Losing Luster

While Virgin Galactic works to upgrade its space places, there was a shake-up within management in the run-up to earnings. Last week, chairman Chamath Palihapitiya announced he was stepping down to “focus on other public company board commitments.”

Palihapitiya was Virgin Galactic’s first chair and was instrumental in taking the special purpose acquisition company (SPAC) pubic in 2019.

SPACs took Wall Street by storm in 2020. The merger tactic provides companies a route to going public while bypassing much of the regulatory scrutiny of initial public offerings. The market’s SPAC fever has broken, although some of the vehicles remain popular with investors.

SPCE stock kicked off a wave of space-sector SPACs when it debuted on the New York Stock Exchange in October 2019. That paved the way for Spire Global (SPIR), Momentus (MNTS) and Astra Space (ASTR) to go public.

But at least 22 SPACs have been canceled since the middle of 2021, according to a report by SPAC Research.

Follow Gillian Rich on Twitter @GillianRich  for space news and more.

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