Rocket Lab shares fall 9% as Neutron debut odds fade

Shares in Rocket Lab slid 9% on Friday after the aerospace company reported record revenue for the second quarter but tempered expectations for a debut launch of its Neutron rocket this year.

The company, which specializes in small satellite launches, posted a net loss of $26.7 million for the quarter, wider than the $22.1 million loss a year earlier, despite revenue rising 14% to $48.3 million. Adjusted earnings per share missed analyst estimates, with a loss of 12 cents per share compared to a 10-cent loss forecast.

Rocket Lab’s Neutron rocket, designed for larger payloads and reusable first-stage recovery, remains under development. The company said in a statement that technical challenges have pushed back the inaugural flight, now expected no earlier than mid-2025. Management cited ongoing testing and integration hurdles as key factors behind the delay.

‘While our financial performance reflects strong execution in our core launch business, the Neutron program requires additional time to ensure mission success,’ said Rocket Lab CEO Peter Beck in a prepared statement.

The revenue growth was driven by an increase in commercial launches, including missions for NASA and commercial customers. The company completed 10 orbital launches in the first half of 2024, up from seven in the same period last year. However, the stock’s decline underscored investor concerns over the delayed Neutron program, which is central to Rocket Lab’s long-term growth strategy.

Analysts at Jefferies maintained a hold rating on the stock, citing the delay as a near-term headwind but acknowledging the company’s strong backlog and diversified revenue streams.

Rocket Lab’s shares, which have gained roughly 15% year-to-date, were trading at $4.25 in midday U.S. trading, down from $4.67 at Thursday’s close.