Virgin Galactic reports no quarterly revenue as it continues to plan for liftoff


Virgin Galactic Holdings Inc. reported no revenue in the second quarter and has collected less than $200,000 in 2020, as its valuation topped $5 billion and the company prepares to take tourists into space.

The space-tourism company reported second-quarter losses of $62.5 million, or 30 cents a share after posting losses of 19 cents a share on sales of about $600,000 in the same quarter a year ago. Virgin Galactic shares
SPCE,
+6.99%

declined about 3% in after-hours trading immediately following the release of the results.

Virgin Galactic was taken public late last year through a special-purpose acquisition company, or SPAC, named Social Capital Hedosophia Holdings that was launched by venture-capital investor Chamath Palihapitiya, who remains chairman of the company. Shares have more than doubled since the SPAC merged with the space-tourism company to form a publicly traded entity, and the company was worth more than $5 billion as trading ended Monday with shares up 7% on the day.

“We are making substantial progress across many areas of the company as we continue to focus on our path to commercial launch and the steps we are taking to get there, including conducting our first powered spaceflight from Spaceport America this fall,” Chief Executive Michael Colglazier said in a statement Monday. Colglazier, a former Walt Disney Co.
DIS,
-0.50%

executive, was named the new CEO of Virgin Galactic last month, while former CEO George Whitesides became chief space officer.

Earnings Watch: After Big Tech helped earnings look better, here comes Disney and Uber

Virgin Galactic has not set an exact date for when it will begin taking tourists into space, but did unveil the interior of its spaceship last week and detailed what customers will experience on their trip. Initial trips were sold for $250,000 apiece, and Virgin Galactic said Monday that it has received deposits for about 600 customers and faced “minimal” requests for refunds. A dozen customers entered into deposit agreements in the quarter, the company reported.



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This sector could have a half million job openings and opportunities for older workers


Although the coronavirus continues to rattle global markets and industries, some analysts expect to see greater demand for advanced manufacturing talent in the U.S. as the pandemic diminishes. That could create opportunities for older men and women, including white-collar professionals struggling to find jobs.

Before COVID-19, there were 500,000 manufacturing jobs open in the U.S., according to the National Association of Manufacturers (NAM). “We’re going to have a need very quickly to ramp up on hiring in those facilities that may have been shut down during the crisis or that need to expand operations,” said NAM president and CEO Jay Timmons in a recent press conference.


“The fact that one can get a certificate in about nine months and totally re-career into a nearly guaranteed job is an incredible opportunity for an older worker.”


— Nora Duncan, Connecticut state director of AARP

As manufacturers frantically try to keep up again with demand for essentials and lifesaving PPE (Personal Protective Equipment) for health care workers as cases rise across the country, their innovation and high-tech problem-solving could help dispel misconceptions that all manufacturing jobs are dirty and physically demanding, said Sara Tracey, project manager of workforce services for the Ohio Manufacturers’ Association in Akron, Ohio.

Manufacturing jobs and what they pay

Entry-level manufacturing jobs in industries such as aerospace, technology and defense include CNC operators, set-up technicians and programmers, as well as inspectors, higher-end assembly technicians and quality assurance.

The pay typically ranges between $35,000 and $65,000, including overtime and benefits, said Richard DuPont, director of community and campus relations for the Advanced Manufacturing Technology Center at Housatonic Community College in Bridgeport, Conn. More experienced professionals can earn upward of $95,000.

80% of older Americans can’t afford to retire – COVID-19 isn’t helping

In Ohio, manufacturers have been training and moving some workers into higher positions so the companies can hire and train new candidates for vacated ones, Tracey noted. Resources such as the Making Ohio website let people explore careers in manufacturing, including robotics, automation and 3-D printing.

Industrial maintenance is an important career pathway these days, as well, Tracey said. This sector is expecting more retirements in the near future, which will create jobs from “traditional machine mechanics to troubleshooting state-of-the-art electronic or robotic processes,” Tracey noted.

Also see: Cannabis, whiskey, and mobile bike repair: These entrepreneurs are thriving in the pandemic

Connecticut, among other states, now offers training programs with community colleges, state manufacturers and other organizations.

From banking to precision tools

This kind of training helped Allison Clemens-Roberts, who is over 50, find work after losing her clerical job in the pensions department of a Connecticut bank in 2017. A severance package gave her time to look for work, but she couldn’t find even temporary employment. She blames age discrimination by white-collar employers.

“There’s no way to hide how old you are. They can ask when you graduated from school,” Clemens-Roberts said.

But while she was out of work, Clemens-Roberts received a postcard from AARP offering a 25% tuition scholarship on advanced manufacturing programs at Goodwin University, a career-focused school in East Hartford, Conn.

She wasn’t interested until her husband Frank saw a TV commercial touting the benefits of Goodwin’s manufacturing and other programs.

“He said, ‘Why don’t you think about changing careers?’” Clemens-Roberts recalled.

So, with several months left on her severance, she enrolled in a full-time, six-month CNC (Computer Numerical Control) Machining, Metrology and Manufacturing Technology certification program. It would prepare her for a job working with automated machine tools which requires mathematical skills, attention to detail and critical thinking.

SectorWatch: 80% of older Americans can’t afford to retire – COVID-19 isn’t helping

Scholarships cut Clemens-Roberts’ tuition bill from $7,000 to $3,200. After a two-month paid internship at TOMZ, a manufacturer of precision components for major medical devices in Berlin, Conn., she was hired in April 2019. Six months later, TOMZ reimbursed Clemens-Roberts $1,500 for her education tab.

Clemens-Roberts said her family is now in a better financial position than when she was working in a bank, living paycheck-to-paycheck. Considered an essential worker, she has kept her full-time job through the pandemic, except for three days in March.

“I never thought I would go to college and participate in a graduation — in cap and gown,” Clemens-Roberts said. “That was a big surprise. And [actor] Danny Glover was the speaker. A bucket-list experience.”

There’s “obviously age discrimination, among other things, at play” for job seekers over 50, said Nora Duncan, Connecticut state director of AARP. “The fact that one can get a certificate in about nine months and totally re-career into a nearly guaranteed job is an incredible opportunity for an older worker.”

While AARP helped Clemens-Roberts pay for the tuition initially, the internship helped her get hired as a machine operator.

Older and younger manufacturing workers helping each other

The search for skilled manufacturing labor across the country is creating opportunities for workers of all ages, said DuPont. And older and younger generations working together are assisting each other.

The older students help younger classmates with life skills, while younger students can help with technology,” said DuPont. “Together, they make excellent teams.”

Don’t miss: How will the robots see you through the pandemic?

Just ask Fernando Vega, 62, who is now a quality inspector at Forrest Machine, in Berlin, Conn. It makes precision-machined parts and other components for the aerospace and commercial industries. In the 1990s, he was a quality inspector before recessions and outsourcing forced him to consider other careers.

He tried working for a nonprofit and though Vega found the work rewarding, it wasn’t financially sustainable.

So, Vega went back to school in spring 2018 to study advanced manufacturing at Goodwin.

“I was in a class of 18, and at first everyone kept to themselves. But when it came time to read blueprints, there was some panic and I said, ‘Don’t panic, I’ll show you.’ The [younger] students helped me with trigonometry, and then we started to work together.”

Vega has worked at his manufacturing job throughout the pandemic. At one point, he was putting in 50 hours a week, but that was reduced to 40 hours plus overtime.

Vega recalled promising his mother that he would go to college. “But that was a long time ago,” he said. His mother never got to see him graduate but Vega feels he’s fulfilled his promise — not only to her, but also to himself. “I love my job,” he said.



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‘Russian influence in the U.K. is the new normal,’ according to a powerful report by lawmakers


Russia sought to influence the Scottish independence referendum in 2014, according to a long-awaited intelligence report published on Tuesday, which also claims Russian influence in the U.K. is “the new normal.”

The cross-party intelligence and security committee published a 50-page report on Russian interference in British democracy, which also pointed to a lack of curiosity into possible Russian meddling in the Brexit referendum in 2016.

It called for an “analogous assessment of potential Russian interference in the EU referendum.”

The report says: “Open source studies have pointed to the preponderance of pro-Brexit or anti-EU stories on RT [Russia Today] and Sputnik, and the use of ‘bots’ and ‘trolls,’ as evidence of Russian attempts to influence the process.”

But in a separate statement, Prime Minister Boris Johnson said a retrospective assessment of the EU referendum isn’t necessary: “We have seen no evidence of successful interference in the EU referendum.”

Read:Russia accused by U.S., Britain, Canada of hacking coronavirus vaccine trials

On the Scottish independence vote, the report went further saying: “There has been credible open source commentary suggesting that Russia undertook influence campaigns in relation to the Scottish independence referendum in 2014.”

The Kremlin has always denied that Russia has sought to interfere with the electoral process of another country, accusing the West of anti-Russian hysteria.

The report says the U.K. is clearly a target for Russia’s disinformation campaigns and political influence operations, but its antiquated paper-based voting system means it is impossible to rig elections.

“In terms of the direct threat to elections,” the report concludes “We have been informed that the mechanics of the U.K.’s voting system are deemed largely sound: the use of a highly dispersed paper-based voting and counting system makes any significant interference difficult.”

Read:Hillary Clinton criticizes British government for blocking Russian report

The committee comprises politicians from all parties and scrutinizes Britain’s intelligence agencies, but was under scrutiny itself last week over the controversial election of Julian Lewis MP as its chairman.

The government accused him of colluding with opposition MPs to get the top job and he was subsequently sacked from the Conservative Party.

The report had been sent to Prime Minister Johnson last October, who delayed its publication because of the December general election. Lewis’ first act as chairman was to release it.

Opinion:Boris Johnson hails his economic plan as a new ‘New Deal.’ Try ‘small deal’ instead



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Lockheed Martin: Your Pandemic-Resistant Long-Term Aerospace Play (NYSE:LMT)


COVID-19 had no material impact on Lockheed Martin (LMT). With more than $140 billion worth of deals in its backlog, the company will thrive in the current environment, and its business could be considered pandemic-proof. As the US annual defense budget is expected to increase from $676 billion in 2019 to $906 billion by 2030, Lockheed Martin, as Pentagon’s biggest contractor, will undoubtedly benefit from such growth. While there’s a risk that the company could lose some of its foreign orders from the oil-rich Gulf states, which are currently suffering from the low oil price environment, Lockheed Martin will be able to offset all of those losses by winning additional defense contracts from the Department of Defense. At the same time, with more than $10 billion in debt, the company is not going to have a liquidity crisis anytime soon, as its EBIT could cover its interest expenses 13 times over. By trading at P/E of 16x, we consider Lockheed Martin to be one of the best aerospace stocks on the market right now with the potential to create value in the long run. For that reason, and because of the fact the company will be able to sustain its dividend payments with a payout ratio of more than 40% for a long time, we opened a long position in Lockheed Martin.

More Room For Growth

While the US economy entered a recession in the first half of the year and recorded the largest unemployment rate in its history, Pentagon’s biggest contractor Lockheed Martin said that the pandemic had no material impact on its business. In Q1, its revenues of $15.69 billion were up 9.4% and its GAAP EPS of $6.08 were above analysts’ estimates by $0.28. By being a defense contractor, Lockheed Martin will always outperform its civil aerospace peers during economic downturns. While companies like Boeing (BA) and Airbus (OTCPK:EADSF, OTCPK:EADSY) are experiencing order cancellations for passenger planes on a massive scale, Lockheed Martin’s businesses from aeronautics, missile and fire control, and rotary and missions systems fields are all experiencing double-digit growth. We could see from the table below that even when compared to other defense contractors, Lockheed Martin is also able to outperform them, as its operating and net margins of 13.53% and 10.21%, respectively, are above the industry’s median margins.

Source: Capital IQ

Thanks to its technical advantages against others, Lockheed Martin will continue to receive new orders from the Department of Defense and create value for its shareholders. In June, the company won a contract worth $1.04 billion for the production of guided missile systems, and just recently, it was awarded $15 billion to develop C-130J transport aircraft for the U.S. Air Force. The defense industry will continue to be the most crucial part of the national security strategy of the United States, and the country’s annual defense budget could grow to $906 billion in 2030, a 34% increase from $676 billion in 2019. The government always has much deeper pockets than businesses and consumers, and as a result, companies like Lockheed Martin, which are also crucial for the United States national security, are always going to be great investments even in turbulent times.

In recent years, Lockheed Martin has been exploring the opportunities to establish a stronger presence in space, the final frontier outside Earth. After the creation of US Space Forces in late 2019, the Congress allocated to it $15.4 billion in 2021, which accounts for nearly 60% of the NASA budget, and that number will increase over the years. As space projects become more lucrative once again, Lockheed Martin is not wasting any time and is already making progress on the space front. The Air Force Space Command already launched two of the company’s GPS Block III satellites and could purchase additional units if needed. At the same time, NASA has already ordered a dozen of the company’s Orion space capsules and is committed to purchasing more if needed. While space projects will account for a fraction of the company’s revenues, they have a high potential to become profit machines in the next couple of decades as countries around the world start to allocate more funds for space exploration.

When it comes to risks, there are a few of them. The biggest risk for Lockheed Martin’s business comes from overseas. Right now around 30% of the company’s revenues come from the oil-rich Gulf States like Saudi Arabia, Bahrain, Kuwait, and UAE. In 2017, Saudi Arabia signed a letter of intent to purchase $110 billion worth of defense equipment from the US manufacturers right away and $350 billion worth of defense equipment in the next 10 years. Two years later, the country officially signed the agreement to purchase Lockheed Martin’s THAAD missile defense systems for $15 billion. While that deal is likely to be completed, there’s now no guarantee that the rich oil state will be able to keep its promise and honor the rest of the deal in the foreseeable future considering the current low oil price environment and an ongoing recession. Saudi Arabia’s economy expects to shrink by more than 6% this year, and there’s a risk that the country will start to cancel all the other defense orders to stabilize its economy.

Another risk comes from China. Recently, the Chinese Communist Party sanctioned Lockheed Martin for its participation in a $620 million deal to ship its Patriot missile systems to Taiwan. At this point, it’s unknown how the sanctions will affect the company, but the company’s Shanghai Sikorsky Aircraft joint venture will likely be negatively affected by that decision.

While those foreign risks might hurt the company’s revenues in the short term, Lockheed Martin will be able to offset them by increasing its market share and getting additional valuable contracts back at home. At the same time, with a $144 billion worth of orders, the company will have enough time to prepare for the possible cancellation of orders and look for other customers, if needed. Even with less than $2 billion in cash and $10 billion in debt, it is not overleveraged and will not face a liquidity crisis if some orders are canceled. Right now, Lockheed Martin’s interest rate coverage is 13x, which means that its EBIT could cover its interest expenses 13 times over. At the same time, the company’s Net debt/EBITDA ratio has been decreasing in the last five years, and it now stands at 1.2x, way below its peers with similar balance sheets.

Source: Koyfin

With that in mind, we should also not forget that Lockheed Martin is one of the most shareholder-friendly companies out there. Despite the ongoing pandemic, it does not need to preserve cash and continues to repurchase its shares and pay dividends to shareholders, with a payout ratio of 40%. In late June, Lockheed Martin announced that it’ll pay its quarterly dividend of $2.40 per share in late September, and those who buy its shares before September 1 will be eligible for the payment. While there’s a risk that Lockheed Martin decides to cut its dividends later on if some foreign orders are indeed canceled, such a risk is minimal, in our opinion. By trading at a P/E ratio of only 16x and expecting to generate earnings of $24.11 per share in 2020, we consider Lockheed Martin stock to be one of the most attractive, pandemic-resistant plays on the market right now. Its opportunities outweigh all the risks, in our opinion, and recently, we opened a long position in the company and plan to hold it at least for a couple of years.

Disclosure: I am/we are long LMT. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.





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President Trump says George Floyd’s death was ‘terrible’ but says ‘more white people,’ die at hands of police than Blacks in U.S.



‘So are white people. So are white people. What a terrible question to ask. So are white people. More white people, by the way. More white people’

That’s President Donald Trump during a CBS interview espousing the view that white people in the U.S. are killed by law enforcement more often than Blacks — a statement likely to be seen as particularly insensitive in the wake of the killing of George Floyd in May, as well as Breonna Taylor two months earlier.

The Wall Street Journal has reported that Trump is consciously focusing on racial and cultural divides during his re-election campaign, with the U.S. in the midst of an economically debilitating pandemic and unrest over social justice centered on a recent series of acts of racially charged actions and police brutality directed at Black Americans.

Floyd, a black handcuffed man, died on May 25 after Derek Chauvin, a white Minneapolis officer, was captured on video driving his knee into his neck for nearly 9 minutes even as Floyd said he couldn’t breathe and stopped moving. That action helped to catalyze a wave of civil unrest.

Trump’s recent remarks on Twitter and in interviews have led some to believe that his comments may have the effect of deepening racial rifts in the country.

In recent weeks, Trump has been seen by some as championing the Confederate flag, which is considered a symbol of the era of slavery in America. The 45th president of the U.S. criticized Black Nascar driver Bubba Wallace, after a noose was reported to have been found in his garage and also questioned a Nascar ban on the Confederate flag that was advocated by Wallace.

Trump has referred to the words “Black Lives Matter” as a “symbol of hate,” and criticized New York Mayor Bill de Blasio for allowing those words to be stenciled on the street in front of Trump Tower in Manhattan. That sign was vandalized on Monday.

On Tuesday, Trump told CBS’s Catherine Herridge that his support of the Confederate flag was on the grounds of freedom of speech. “All I say is freedom of speech. It’s very simple. My attitude is freedom of speech. Very strong views on the Confederate flag. With me, it’s freedom of speech. Very simple. Like it, don’t like it, it’s freedom of speech.”

Meanwhile, Trump’s claims of disproportionate police violence against white people has been challenged with data. CBS in its report, citing a late June Harvard research report, noted that the number of white people killed by the police between 2013 and 2017 was higher than any other demographic but notably because that demographic represents a larger portion of the population. That study, however, notes that Black people are three times more likely to be killed than Whites by law enforcement.





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