Orbital Sciences Corporation (NYSE: ORB) today reported its financial results for the second quarter of 2013. Second quarter 2013 revenues were $333.1 million, compared to $371.3 million in the second quarter of 2012. Second quarter 2013 operating income was $26.3 million, or 7.9 percent operating margin, compared to $26.1 million, or 7.0 percent operating margin, in the second quarter of 2012. Net income was $16.3 million, or $0.27 diluted earnings per share, in the second quarter of 2013, compared to net income of $14.6 million, or $0.25 diluted earnings per share, in the second quarter of 2012. Orbital's free cash flow* in the second quarter of 2013 was $6.9 million compared to $18.9 million in the second quarter of 2012.
Mr. David W. Thompson, Orbital's Chairman and Chief Executive Officer, said, "Although revenues were down, Orbital reported another quarter of solid bottom-line financial results with higher operating margins, net income and earnings per share compared to the second quarter of last year. These results reflect profit margin increases in our launch vehicles and satellites and space systems segments as well as lower interest expense resulting from our debt refinancing transaction late last year. In addition, the company reported strong quarterly new orders and option exercises totaling $875 million, which boosted total contract backlog to $5.4 billion."
Revenues decreased $38.2 million, or 10 percent, in the second quarter of 2013 compared to the second quarter of 2012. Revenues decreased $36.3 million in the satellites and space systems segment and $16.4 million in the advanced space programs segment. Launch vehicles segment revenues were up $7.7 million and intersegment revenue eliminations were down $6.8 million.
Operating income increased $0.2 million, or 1 percent, in the second quarter of 2013 compared to the second quarter of 2012. Operating income grew $2.4 million in the launch vehicles segment, remained unchanged in the satellites and space systems segment and decreased $4.3 million in the advanced space programs segment. Operating income in the second quarter 2012 included unallocated corporate-level expenses totaling $2.1 million related to a potential acquisition that was not consummated.
Net income in the second quarter of 2013 was $16.3 million, or $0.27 diluted earnings per share, compared to $14.6 million, or $0.25 diluted earnings per share, in the second quarter of 2012. While operating income increased marginally, interest expense declined $1.8 million in the second quarter of 2013 compared to the second quarter of 2012, reflecting a reduction in the interest rate on the company's long-term debt resulting from a debt refinancing transaction that the company completed in the fourth quarter of 2012. The company's effective income tax rate was 36 percent in the second quarter of 2013 compared to 38 percent in the second quarter of 2012.
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