Al Root

Space is taking off.

Shares of commercial space start-up Rocket Lab jumped after the company reported better-than-expected third-quarter results late Tuesday.

The stock rose 26% to $18.40 in premarket trading Wednesday. S&P 500 and Dow Jones Industrial Average futures each were down about 0.2%.

The company, which is akin to a mini-SpaceX, reported third-quarter sales of $105 million, up 55% from a year earlier, in a report late Tuesday. Wall Street was looking for $103 million.

Looking ahead, Rocket Lab expects to generate sales of $125 million to $135 million in the fourth quarter. Wall Street was looking for $122 million.

The company's adjusted earnings before interest, taxes, depreciation, and amortization (Ebitda) loss for the quarter was almost $31 million, a little narrower than Wall Street expected.

The company launched its Electron rockets 12 times this year. The backlog ended the quarter at $1.05 billion. There are many more launches to come.

Overall, the results looked solid, and investors appeared pleased.

"Significant achievements for the quarter included signing a launch service agreement for multiple launches on Neutron with a confidential commercial satellite constellation customer," said CEO Peter Beck in a news release. "We expect to close out the year strongly with more Electron launches scheduled in November and December, alongside continued progress across Neutron and space systems, that is behind our guidance for a record $125 million to $135 million revenue quarter in Q4."

Neutron is the company's second, larger launch system in development. Electrons are smaller rockets in operation today. A Neutron will carry about 13 metric tons into low Earth orbit, while an Electron rocket can carry some 300 kilograms into low Earth orbit.

"We are encouraged by Neutron's progress as its first launch timeline is unchanged," wrote KeyBanc analyst Michael Leshock in a report Tuesday, adding that getting a Neutron customer represents a "major milestone" and "underscored the persistent tightness in the supply/demand environment for launch services."

Not many people can launch a significant amount of rockets. Neutron's first launch could happen in the second half of 2025.

KeyBanc rates Rocket Lab shares Buy and has a $12 price target on the stock.

Write to Al Root at allen.root@dowjones.com

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November 13, 2024 07:36 ET (12:36 GMT)

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