After almost a year of delays, it looks as if we are going to have to wait a little bit longer for the launch of GeoEye-1.

GeoEye, Inc. (NASDAQ: GEOY), a provider of space-based and aerial imagery and geospatial information, announced today after the market closed, that the launch of GeoEye-1 has been further delayed due to Hurricane Hanna, and could quite possibly be delayed further depending on the outlook for the other storms that are now churning in the Atlantic Ocean.

This all comes after GeoEye confirmed on Friday August 29, 2008 that the final checks have been made and that all systems were a go for the September 4th, 2008 launch of GeoEye-1, which will now be delayed to no EARLIER than September 7th.

However, I wouldn’t hold my breath for that launch date yet, especially with the uncertainty in the upcoming named storms that are on a general path for the east coast of the US.

There was one bit of good news in all of this however.

GeoEye announced a deal with Google (NASDAQ: GOOG) to provide images from GeoEye-1 exclusively to Google for Google Earth and Google Maps.

New to the GeoEye story?

• Read my initial buy recommendation here.
• or listen to my EXCLUSIVE interview with GeoEye’s management team here.

Click here to read my complete GeoEye research report

GeoEye-1 Launch Locked and Loaded

Now we’re waiting on the weather

As you’ll recall a few weeks ago, before their earnings release, GeoEye stated that the launch of GeoEye-1 would further be delayed as a result of a problem with one of the pieces of equipment that is necessary to track and help deliver the satellite to space.

This delay and problems with equipment was not related in any way to GeoEye, or GeoEye-1, but rather to United Launch Alliance (”ULA”, a joint venture between Boeing (NYSE:BA) and Lockheed Martin (NYSE:), which is handling the launch.

You can read more about this delay and why it occurred here.

Today’s announced delay was also due to ULA and was out of GeoEye’s control.

According to GeoEye, ULA advised GeoEye that Hurricane Hanna’s projected path off the east coast of Florida has impacted the availability of certified Delta II launch specialists available to travel to Vandenberg Air Force Base (VAFB) to support the GeoEye-1 launch.

According to the press release, ULA frequently shifts personnel from coast to coast to support launches.

Now, why the crew and personnel responsible for a $500 million piece of equipment that has been in the making for 5 years be stationed on the other side of the U.S. from where it was going to be launched is totally beyond me, but that’s where things stand as of now.

It appears the problem lies in the military declaring what is called a HURCON 4 (Hurricane Condition 4), meaning that there is a storm with sustained winds of greater than 50 knots anticipated to hit within 72 hours at the Cape Canaveral Air Force Station (CCAFS).

Under this condition, personnel may elect to remain with their families for the duration of the storm instead of travelling to California for the GeoEye-1 launch.

If this weren’t bad enough, there are a total of 3 named storms (Hanna, Ike and Josephine) now plowing their way towards the U.S. so we might not be out of the woods yet.

The good news is that a Flight Readiness Review was conducted on Aug. 28 and the launch vehicle, launch range, the GeoEye-1 satellite, and all other program elements are ready for launch, according to GeoEye.

When GeoEye-1 does launch, you can follow the launch in real-time on GeoEye’s website here:

http://launch.geoeye.com

ULA is currently planning the launch for no earlier than September 7 and is taking all of the steps necessary to support this date, and GeoEye will announce a new date as soon as it is confirmed by ULA.

However, as we’ve seen before, I wouldn’t go out and buy any lottery tickets or base any credible assesment on an exact launch date until GeoEye-1 is actually launched.

Until that happens, I won’t even speculate on the actual launch date, even if/when GeoEye confirms the date.

More info about GeoEye-1

GeoEye-1 will be lifted into a near-polar orbit by a 12-story-tall United Launch Alliance Delta II 7420-10 configuration launch vehicle, pictured at right.

The Delta II rocket is expected to deploy the GeoEye-1 satellite approximately 58 minutes after liftoff and will reach its proper orbit about 90 minutes after launch.

Speaking of tight timing, in order to achieve the proper orbit, the launch window will only be open for 84 seconds.

The success of these types of launches is over 98.5%.

Needless to say, everything will have to be performed to perfection, but that’s one of the reasons why launches are handled by so few companies and why it takes so long to secure a launch date.

Once in orbit, GeoEye-1 will undergo system calibration and testing designed to ensure that the equipment is working as it should be, and can produce usable imagery.

This process usually takes about 45-60 days, and before GeoEye can begin selling its imagery to the US government via the National Geospatial-Intelligence Agency (NGA), they will need to get approval from the NGA that the images meet their strict criteria and guidelines for usable imagery.

GeoEye then expects to be able to offer imagery and products to customers in the mid- to late-October timeframe, and that includes Google.

GeoEye-1 is designed to take color images of the Earth from 423 miles (681 kilometers) in space and will be moving at a speed of about four-and-a-half miles (seven kilometers) per second, and make 15 earth orbits per day.

With the ability to revisit any location on the globe every three days, and at lesser resolution more frequently, GeoEye-1 will enable customers to receive imagery updates on a regular basis and will be ideal for large-scale mapping projects.

This capability will benefit a broad array of industries including national defense and intelligence, online mapping, state and local governments, environmental monitoring and land use management, oil and gas, utilities, disaster management, insurance and others.

Once launched, GeoEye-1 will have the highest resolution of any commercial imaging system, 0.41-meters or 16 inches for panchromatic (black and white) imagery and multispectral (color) imagery at 1.65-meter resolution.

The highest resolution is the equivalent of being able to see home plate on a baseball field from space.

In addition, GeoEye-1 will be able to map the location of an object that size to within about nine feet (three meters) of its true location on the surface of the Earth without need for ground control points.

However, due to U.S. Government licensing restrictions, commercial customers will have access to imagery at half-meter ground resolution.

Together, GeoEye’s IKONOS and GeoEye-1 satellites can collect almost one million square kilometers of imagery per day and provide GeoEye with a “constellation” of multiple satellites that are of a high resolution variety which further enhances GeoEye’s imagery capacity.

Finally, you can listen to an interview with GeoEye’s VP of Marketing and Communications, Mark Brender speaking about the launch on NPR here. It’s definitely worth a listen:

http://www.npr.org/templates/story/story.php?storyId=94110470

Bottom Line: Another delay, ho hum…At this point things are out of GeoEye’s control, so we have no choice but to wait and see what happens.

I can tell you personally that if we are upset as investors at the continued delays, GeoEye’s management team is absolutely livid, and is doing everything in their power to see the launch take place sooner than later.

The launch of GeoEye-1 represents a seminal occasion in GeoEye’s history, whether positive or negative, and will go a long way towards fulfilling the initial promise of GeoEye’s revenue and profit potential.

No one wants to see this sucker launch more than GeoEye, and you can rest assured that they are doing everything within their power to make sure that happens successfully, and as quickly as possible.

GeoEye Teams Up With Google on Exclusive Deal

GeoEye recently also announced a deal with Google to provide imagery to Google Maps and Google Earth utilizing the company’s GeoEye-1 satellite imagery.

Under the terms of the deal, GeoEye through the GeoEye-1 satellite, will provide imagery to Google exclusively and will not sell its imagery to any other online mapping websites, although Google will continue to use imagery from other providers such as GeoEye’s only U.S. competitor, DigitalGlobe (NYSE: DGI).

In addition, as a show of good faith, GeoEye put Google’s logo on their launch vehicle in preparation for the launch.

While this deal isn’t expected to be significant to GeoEye’s revenues and earnings, it does provide GeoEye with valuable industry caché, and shows further penetration of GeoEye’s imagery capabilities.

In fact just recently, GeoEye’s imagery was used in a video game by UbiSoft, Tom Clancy’s H.A.W.X, an air combat game, to provide the realistic terrain models and graphics that were used by the game’s design engine.

You can read more about that here.

Bottom Line

The potential and excitement surrounding a successful launch of GeoEye-1 is palpable.

To say that the company’s prospects depend on this launch is an understatement.

GeoEye IS GeoEye-1.

Without it, they will not succeed with an aging satellite fleet and lost income and revenues that will be stolen from them by their closest rival DigitalGlobe.

We’re approaching the home stretch now with GeoEye and are at the culmination of over 4 year’s worth of work.

All we can do now is hold on to our hats and watch a successful launch and subsequent check-out of GeoEye-1’s imagery, and then sit back on our investment thesis as GeoEye starts cleaning up in the satellite imagery arena.

• If you are interested in learning more about the launch and tracking the launch of GeoEye-1, GeoEye provided a web page dedicated to constant updates and real-time streaming video of the launch.

You can visit that here:

http://launch.geoeye.com

New to the GeoEye story?

Click here to read my complete GeoEye research report

• Read my initial buy recommendation here.
• or listen to my EXCLUSIVE interview with GeoEye’s management team here.

*Variables You Should Know About GeoEye, Inc. (NASDAQ: GEOY)
Current Recommendation:	STRONG BUY
The Company:	GeoEye, Inc. provides space-based, and aerial imagery and geospatial information through high-resolution and low-resolution imagery, imagery-derived products, and image processing services to customers worldwide. Its imagery information products enable customers to map, measure, and monitor the earth for intelligence gathering, precision mapping, construction planning, and environmental monitoring applications, among others.
Why Buy Now:	Established Large Player/Customer Base Consistent Revenue Streams High Margin Business Fantastic Growth Potential in an Expanding and Rapidly Developing Market Downside Protection In Recessionary Climate Several Upcoming Positive Catalysts Should Bring Attention to the Sector and Company Fantastic Stock Price Valuation/Entry Point Largely Underfollowed Stock Well Capitalized for the Next 12 Months or More
Market Cap:	$451.0
Revenue (2007):	$181.37
Cash/Debt:	$221.5/ $247
Current Price:	$25.00
Risk Rating (?):	8 (High)
Position Size (?):	1/2 (5-5-08), 1/4 (6-12-08)
Buy Around Price (?):	$22.00 (5-5-08), $16.50 (6-12-08)

*As of 9-2-08. Except share price, all values in millions.