LV shuttle supplier’s stock falls on news

Monday, Feb. 3, 2003 | 10:07 a.m.

SUN STAFF AND WIRE REPORTS

American Pacific Corp. of Las Vegas, Boeing Co., Alliant Techsystems Inc. and other companies that supply NASA face revenue losses as the space shuttle fleet remains grounded and some work on the International Space Station is postponed.

American Pacific shares opened down $1.32 or 14 percent this morning on news of the shuttle disaster. The Las Vegas company has a plant near Cedar City, Utah, that produces perchlorate, the fuel for the shuttle's solid rocket booster motors.

Those motors are used on liftoff and then are jettisoned, retrieved and reloaded with fuel.

Shares of Alliant, the only supplier of solid rocket motors for the shuttles, fell $4.86, or 8.9 percent, to $49.50 at 8:47 a.m. on Instinet.

The National Aeronautics and Space Administration's three shuttles won't fly again until the agency knows why Columbia, its fourth and oldest shuttle, disintegrated while preparing to land Feb. 1. That means supplies and cargo for the International Space Station can't be delivered.

"The next few years are going to be kind of traumatic for the American manned space program," said Charles Vick, an independent consultant and analyst based in Virginia.

The 1986 explosion of the Challenger shuttle halted the program for about 32 months. Delays from the Columbia disaster may be shorter, with another flight within a year because of the need to complete construction of the International Space Station.

"There is more pressure than there was after Challenger to get this fleet up and flying," said Marco Caceres, an industry analyst at the Teal Group. "They've got hardware that needs to go up or else it's just sitting in a warehouse somewhere."

Boeing, NASA's biggest contractor, got about $1.1 billion from construction work on the space station in 2001. It also had $72 million in pretax profit the same year from the United Space Alliance, its venture with Lockheed Martin Corp. that manages shuttle launches. Boeing gets about $2 billion, or less than 5 percent, of annual sales from the agency, spokesman Dan Beck said.

Alliant gets about half of its $1.8 billion in annual sales from its aerospace unit. The company, based in Edina, Minn., may not be as well protected from the financial effects of the Columbia accident as Boeing and Lockheed, analysts said.

Shares of Chicago-based Boeing fell 10 cents to $31.49 as of 12:11 a.m. in Germany. Lockheed, the biggest U.S. defense contractor, rose 13 cents to $51.18 from $51.05.

Boeing is the prime contractor for the space station, a manned research facility it has been helping to build since 1993. Boeing has 5,000 employees that make parts for the power systems, computers, life-support and the U.S. scientific laboratory.

"Any time we are pushing the envelope in research and technology, there are going to be tragedies," said Sen. Kay Bailey Hutchison, a Texas Republican. "I would never want America to walk away from being in the forefront of the research."

Boeing has completed much of the manufacturing of components for the space station that the U.S. government has funded, Beck said. The company has been preparing to deliver those parts on the next shuttle launch that was scheduled for March.

"We haven't received any guidance from NASA yet on what their plans are with regards to continued operation of the space station," Beck said. "We're waiting on NASA's plans."

Boeing, the world's largest maker of commercial aircraft, has been relying more on its military business, which includes NASA programs. The space unit made up $11 billion of Boeing's $54 billion in sales last year. The company had $492 million in total net income last year. It acquired the shuttle program after buying Rockwell International Corp.'s aerospace business in 1996.

Alliant's Thiokol unit makes the rocket boosters used in shuttle takeoff. Thiokol products aren't used to land, spokesman Rod Bitz said. Morton-Thiokol Inc. made the rocket for the Challenger, which exploded during launch on Jan. 28, 1986. The next shuttle flight wasn't until Sept. 29, 1988.

Alliant acquired Thiokol in 2001 from aluminum maker Alcoa Inc. At the time, Thiokol had $570 million in annual sales.

Moog Inc., which had $719 million in sales in its fiscal year ended in September, makes controls for the space shuttles. Its space-controls business had a backlog of about $72 million.

Other publicly traded companies involved in the NASA's shuttle or space station programs include Ducommun Inc., which makes external tanks for the shuttle; Orbital Sciences Corp., a maker of robotics; and Jacobs Engineering Group Inc., which provides engineering services for the space station.

Ducommun fell 4 cents to $13.3 in Germany from its Friday close of $13.34 in the U.S. Orbital Sciences declined 30 cents to $5.15 from $5.45. Jacobs Engineering rose to $37.35 in Germany from $37.22 in the U.S.

L-3 Communications Holdings Inc. made communication systems for the space station; Analex Corp. provides laboratories; and Spacehab Inc. makes research modules.

Whether NASA will be able to keep money flowing into those programs will be determined in coming months, analysts said, as the agency faces tough questions about its purpose.