Aug 10 (Reuters) - Rocket Lab forecast third-quarter margins below Wall Street expectations on Monday, as rapid expansion into satellite manufacturing boosts sales but weighs on profitability.
As sales of lower-margin satellite platforms rise, they are expected to account for a larger share of the company's revenue as it expands its satellite-manufacturing business, a segment that is becoming increasingly important as it diversifies beyond rocket launches. Its shares fell more than 8% in extended
trading.
The company expects gross margin of 29% to 31% in the third quarter, below analysts' average estimate of 37.6%, according to data compiled by LSEG.
Rocket Lab's space-systems division, which makes satellite components, spacecraft, separation systems, solar cells and other mission hardware, is its largest revenue contributor, accounting for 81% of revenue.
The unit helped drive a 62% jump in second-quarter revenue to a record $234 million, topping the estimate of $231.4 million.
The company is also pushing ahead with Neutron, its reusable medium-lift rocket designed to compete for commercial satellite-constellation missions, civil-space programs and U.S. national-security launches. Rocket Lab is targeting Neutron's arrival at the launch pad in the fourth quarter of 2026.
It has continued spending heavily to develop the rocket, build launch infrastructure and prepare for production, while integrating recent acquisitions, including laser-communications company Mynaric.
CEO Peter Beck said demand for Neutron was being driven by limited launch capacity, prompting customers to book missions years in advance.
Rocket Lab won a contract from Kepler Communications to launch several communications and in-orbit computing satellites on Neutron in 2028.
The company forecast third-quarter revenue of $250 million to $265 million, above Wall Street estimate of $238.5 million.
It said it expects strong growth in both launch and space-systems businesses, supported by a record $2.36 billion backlog at the end of June.
Rocket Lab, in June, also announced plans to acquire satellite communications company Iridium in an $8 billion deal, which would give it a recurring-services business.
(Reporting by Akash Sriram in Bengaluru; Editing by Shilpi Majumdar)
