Don't show againGeoEye Making Some Noise
GeoEye Increases Reach of GeoEye-1 Imagery
Reseller contracts ensure consistent availability of imagery
GeoEye-1
Also this week GeoEye announced that they have signed several imagery reseller deals with partners in China, the Middle East, Turkey and Russia to ensure that their GeoEye-1 imagery will be fully utilized and distributed on GeoEye’s behalf.
These deals also seem to imply that GeoEye’s partners will also resell value added services, such as image manipulation and other special enhancements.
The first deal was an extension of a deal that GeoEye already had in place with Beijing Earth Observation, Inc. (BEO), located in Beijing and owned by Eastdawn Group.
BEO has been GeoEye’s exclusive master reseller in China since April 2007 for its IKONOS high-resolution products and value-added solutions.
BEO and GeoEye have entered in an agreement appointing BEO as the exclusive master reseller in China for GeoEye-1 imagery and value added services.
The second deal was with a company called Space Imaging Middle East, located in Dubai, United Arab Emirates.
Space Imaging Middle East renewed its IKONOS Regional Affiliate Agreement and signed a new agreement to become an authorized reseller of GeoEye-1 imagery and products in Dubai and the Middle East.
Space Imaging Middle East has been GeoEye’s partner and Regional Affiliate for IKONOS imagery collection and distribution since January 2000.
Finally, GeoEye announced a deal with INTA Spaceturk, located in Ankara, Turkey, and a subsidiary of Cukurova Group
INTA signed an agreement on Feb. 27, 2009 to become an authorized reseller of IKONOS and GeoEye-1 imagery and products.
INTA Spaceturk has the exclusive rights to sell IKONOS and GeoEye-1 imagery in Turkey, Georgia and Azerbaijan and has been GeoEye’s partner and regional affiliate since 2001.
Also, in the same press release, GeoEye made a quick note that they have also signed an agreement with seven new non-exclusive resellers in Russia to sell IKONOS and GeoEye-1 imagery in that country.
Bottom line: These are all positive developments and follow along with what GeoEye’s management told us in the past that there were many resellers ready to commit to selling GeoEye-1 imagery after that imagery was fully approved by the NGA.
Now that that domino has fallen, the rest of these deals are taking shape, and GeoEye is beginning to actually produce lots of usable imagery, and make lots of high margin revenue.
Last But Not Least: Google
Exclusive GeoEye-1 partnership begins
Also this week, GeoEye announced that Google has begun to incorporate GeoEye-1 imagery under their exclusive deal announced late last year, for GeoEye-1 imagery to be used in Google Earth, Maps, etc.
Here’s the link where you can see some of the spectacular images already collected.
–> click here
Google Earth image of Mount Fuji.
If you haven’t already looked at Google Earth and these images, they are amazing, and the ability to zoom in and go from location to location is breathtaking.
It will more than likely take years for Google to gather all the imagery that they want, but that’s good news for GeoEye, as it means that they will always have a hungry customer that will want new images for the foreseeable future.
Bottom Line
GeoEye Back on Track?
It’s not that GeoEye wasn’t on track, but management’s persistent silence and potential issues within the company are never a good thing to unsuspecting investors.
The flurry of news that was bestowed upon us this week reflects GeoEye’s acknowledgment that they were behind not only in their SEC and earnings filings, and by extension behind in their responsibility with shareholders, but also that GeoEye wasn’t doing a good enough job communicating what’s going on within the company.
All of these announcements, including the restatement of earnings from past years, assuages many of the fears and doubts that were starting to creep into investor’s minds as to what the heck is going on.
I think we’ll get much more clarity on everything when GeoEye finally does report earnings sometime within the next couple of weeks.
New to the GeoEye story?
- Read my latest earnings preview here.
- OR: read my latest buy recommendation here.
- OR: listen to my EXCLUSIVE interview with GeoEye’s management team here.
- OR: Read my latest update on the company’s Q3/2008 earnings release and conference call 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: |
|
| Market Cap: |
$366.2 |
| Revenue (TTM): |
$167.34 |
| Cash/Debt: |
$221/ $247 |
| Current Price: | $20.00 |
| 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 3-20-09. Except share price, all values in millions.
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