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DigitalGlobe Stock Price Slammed; Earnings, Competition to Blame

Thursday, February 27th 2014
By Joe Francica

DigitalGlobe's stock (NYSE: DGI) was slammed yesterday by investors upon hearing the news that they missed Wall Street's consensus estimate and took a 27% price hit. The stock has rebounded in early trading today.

Reason's given by stock analysts include not only the missed expectations to their quarterly report but also a their full year earings estimate. According to the Denver Post, "The company expects 2014 revenue to fall to between $630 million and $660 million, below its previously stated $712.4 million estimate."

DigitalGlobe also announced yesterday's acquisition of Spatial Energy, a 35-person company that performs image classification and analysis of satellite imagery and has a particular focus on the oil and gas industry. mentioned that DigitalGlobe was coming under fire from "low end, lower resolution" competitors. The article didn't mention company names but presumably this would be from rivals Airbus Defense and Space (formerly Astrium) and Blackridge (formerly RapidEye). While SkyBox Imaging and Urthcast are still considered in start-up phase, these companies have also entered the market with different solutions for earth observation imaging data. These new challengers will continue to put pressure on DigitalGlobe as it also looks to expand beyond selling imagery and move more toward services such as location analytics.

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