Virgin Galactic earnings Q4 2019: Loss greater than expected

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Virgin Galactic’s spacecraft Unity flies to its new home in at Spaceport America in New Mexico on Feb. 13, 2020.

Virgin Galactic

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Virgin Galactic reported a larger-than-anticipated loss when it reported fourth-quarter results on Tuesday, although the interest from prospective customers in the company’s future spaceflights continued to climb.

Shares of Virgin Galactic dropped about 6% in after-hours trading from its close at $34.04. The stock slipped 0.7% on Tuesday, although it earlier climbed as much as 8% while fueled by more speculative trading.

The company also announced that on Wednesday it will begin accepting $1,000 deposits toward space flight tickets. Those who pay the fully-refundable deposit will be the first offered reservations when Virgin Galactic re-opens ticket sales later this year.

Expectations vs. results

Virgin Galactic reported an EBITDA (earnings before interest, taxes, depreciation and amortization) loss of $55 million, more than the $46.9 million loss expected according to analysts surveyed by FactSet. EBITDA is an accounting measure of the company’s total financial performance, although it typically excludes some costs such as capital investments.

The company reported just $529,000 of revenue for the fourth-quarter, below the $800,000 of revenue in its previous quarter.

Virgin Galactic said it has received 7,957 “registrations of interest” from potential customers since December 2018, more than double the 3,557 registrations of interest it reported three months ago.

Overall, Virgin Galactic reported a net loss of $210.9 million for 2019. The company aims to be profitable by 2021.

Virgin Galactic’s market value has soared to about $7 billion since its October debut on the New York Stock Exchange, multiplying several times over in the past few months.

The company has 603 reservations on its books, for most tickets ranging in price from $200,000 to $250,000.

Last year, during its investor roadshow, Virgin Galactic projected it would fly 66 passengers to space on 16 flights in 2020. Chairman Chamath Palihapitiya told CNBC in November that he expects Virgin Galactic to begin commercial operations in the middle of this year.

Virgin Galactic earlier this month relocated its spacecraft to its operating base in New Mexico from its development facility in California.

The company has received more than $1 billion of investment since its founding in 2004.

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