Orbital Sciences Corp. (ORB:US) yesterday launched its 130-foot Antares rocket for the first time, a milestone in the company’s plans to deliver cargo to the International Space Station.
The unmanned rocket lifted off from the National Aeronautics and Space Administration’s Wallops Flight Facility on Virginia’s Eastern Shore. Orbital is seeking to follow Elon Musk’s Space Exploration Technologies Corp., or SpaceX, which last May became the first company to dock a commercial craft at the station.
Shares of Orbital rose 2.7 percent to close today at $16.65 in New York trading.
Yesterday’s test launch delivered a mock cargo ship into orbit that separated from the rocket after about 10 minutes, destined to burn up in Earth’s atmosphere in a few weeks. No contact will be made with the space station on this mission.
“Today did go extremely smoothly, and it’s a real testament to the team that it did,” Frank Culbertson, an Orbital executive vice president and former astronaut, said during a press conference after the launch. “Making it look easy takes a lot of hard work and overcoming a lot of challenges.”
The company intends to dock with the space station in June or July, and then make regular cargo deliveries as early as September under a $1.9 billion contract.
The launch came after several delays. An attempt on April 17 was scrubbed 12 minutes before liftoff because a data cable prematurely disconnected from the rocket. An April 20 attempt was called off because of high winds. A launch planned for last August was scrapped in part because of faulty fuel valves at the Wallops Island launchpad, Barron Beneski, an Orbital spokesman, said last year.
Orbital is now moving away from technical and development risks and toward production, said Patrick McCarthy, managing director at Arlington, Virginia-based FBR Capital Markets & Co., who rates Orbital shares outperform.
“That’s when stocks tend to work really well,” he said in a phone interview.
For Orbital, the stakes are high because any setback raises the risk that NASA could award a greater share of future supply missions to Hawthorne, California-based SpaceX, William Loomis, an analyst at Stifel Nicolaus & Co. in Baltimore, said in a phone interview before the launch
“Orbital has to perform well if they want to be competitive,” Loomis said. “As each milestone gets behind them, there’s less risk.”
Shares of Orbital have gained 21 percent this year after falling 5.2 percent in 2012. A successful launch might boost shares about 5 percent, Loomis, who has a buy rating on the company, wrote in an April 12 note to clients.
NASA is relying on companies such as Orbital and SpaceX to supply the space station with food and other cargo, after retiring its shuttle fleet in 2011. NASA also has agreements with the governments of Europe, Japan and Russia for the work.
The launch “lays the groundwork for the first Antares cargo mission to the International Space Station later this year,” John Holdren, a science and technology adviser to President Barack Obama, said in a statement. “The growing potential of America’s commercial space industry and NASA’s use of public-private partnerships are central to President Obama’s strategy to ensure U.S. leadership in space exploration.”
Orbital’s contract with NASA includes eight cargo resupply flights to the station. Closely held SpaceX has a $1.6 billion contract for a dozen supply trips.
In Orbital’s missions, an Antares rocket would launch an unmanned supply ship known as Cygnus into orbit. The one-way spacecraft would then navigate to the space station and deliver about 2 tons of crew supplies, spare parts and science experiments per trip. It, too, will burn upon re-entering Earth’s atmosphere.
Orbital’s launch was also a milestone for the NASA facility, located 157 miles (253 kilometers) from the nation’s capital. Antares (ANT) was the largest rocket launched from the site in its 67-year history.
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