Virgin Galactic Reports Better-Than-Expected Sales in Third Quarter

by Warren Seah

Virgin Galactic (ticker: SPCE) announced their third-quarter sales on Thursday, surpassing Wall Street expectations. Despite the challenges faced in the space tourism industry, the company remains optimistic about its future prospects.

Overwhelmingly Positive Experience for Astronauts

CEO Michael Colglazier expressed his satisfaction with the successful completion of six spaceflights within six months. This achievement not only demonstrates the repeatability of Virgin Galactic’s spaceflight system but also highlights the overwhelmingly positive experience of their Astronauts.

Strong Sales Boost Confidence

The better-than-expected sales in the third quarter indicate that space tourism pricing remains robust. With a per-share loss of 28 cents from sales of $1.7 million, the company outperformed Wall Street expectations of a 42-cents loss from sales of $1.1 million, according to FactSet.

Fourth Quarter Projections

Virgin Galactic anticipates generating $3 million in sales for the fourth quarter, supported by the completion of two flights to date. This projection exceeds Wall Street’s estimate of $2.1 million. The company’s current results, along with its sales momentum, have contributed to a 9% increase in Galactic stock during premarket trading on Thursday, reaching $1.70 per share.

Challenges and Future Outlook

Despite the recent success, Virgin Galactic’s stock has faced a significant decline of approximately 65% over the past year. Starting a space tourism business has proven to be more challenging than initially anticipated. However, the company remains determined and aims to achieve cash-flow break-even by 2026, one year earlier than expected.

Cash Reserves and Potential Sales

As of the end of the third quarter, Virgin Galactic holds approximately $1.1 billion in cash reserves, representing a $108 million decrease from the previous quarter. While the company originally projected 2023 sales of $590 million during its SPAC merger in late 2018, the revised estimate now stands at around $7 million. Achieving annual sales levels of $300 million to $400 million would be necessary to reach cash flow break-even, which would require roughly 2,000 people to be flown to the edge of space.

Virgin Galactic remains committed to their goal of revolutionizing space tourism, despite the challenges they have faced.

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