GeoEye's Shares Got Crushed: What You Need to Know

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Satellite imagery expert GeoEye (NAS: GEOY) blinked today, sending shares down by as much as 17.3% on more than triple their average trading volume.

So what: GeoEye's third-quarter report was a disappointment on every level, from current sales and earnings to future forecasts. This hurts all the more in the light of archrival DigitalGlobe's (NYS: DGI) report of an equally slow quarter but with a much brighter outlook.

Now what: The company underscored new or renewed contracts from several government agencies, yet slow sales to Uncle Sam were a main driver of this quarter's disappointing results. I find that dichotomy a bit nerve-wracking, because you'd think that close government ties would lead to revenues you could set your clock by. Apparently not.

GeoEye also counts infotech behemoths Google (NAS: GOOG) and Oracle (NAS: ORCL) among its clients, but that steady revenue share isn't big enough (yet!) to stabilize the whole operation. Keep an eye on those revenue swings, dear Fool.

Interested in more info about GeoEye? Add it to My Watchlist.

At the time thisarticle was published Fool contributorAnders Bylundowns shares of Google but holds no other position in any of the companies mentioned. The Motley Fool owns shares of Google and Oracle.Motley Fool newsletter serviceshave recommended buying shares of Google and GeoEye. Try any of our Foolish newsletter servicesfree for 30 days. We Fools don't all hold the same opinion, but we all believe that considering a diverse range of insights makes us better investors. Check outAnders' holdings and bio, or follow him onTwitterandGoogle+. We have adisclosure policy.

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