Bloomberg News reports that Boeing Co. (NYSE: BA) has a whole lot of losing going on. Yesterday, Boeing suffered its fourth straight defeat in three months on a U.S. defense contract. This loss represents $41 billion in lost revenue.

Here are the four contracts:

• Yesterday. Lockheed Martin (NYSE: LMT) the world's largest defense company, beat Boeing for a $1.46 billion U.S. Air Force award to build a new network of navigation satellites for military and civilian use. The Air Force said it reviewed five years of past performance for both contractors. Boeing has yet to launch a single satellite under its most recent GPS contract from April 1996, and in 2006 the company forfeited $21.4 million and replaced the program's managers after delays and cost overruns.
• February 2008. EADS, parent of Airbus and Northrop Grumman (NYSE: NOC) won a $35 billion tanker contest for the Air Force. I've spilled much electronic ink on this one -- it looks like the Air Force changed the specifications for the project but only told EADS about the change.

The following excerpt originally appeared as part of the Israel Opportunity Investor, a monthly newsletter I publish for paid subscribers.

Gilat Satellite Networks Ltd. (Nasdaq: GILT) provides Internet Protocol [IP] based digital satellite communication and networking products and services. The Company designs, produces, and markets very small aperture terminals (VSATs), two-way satellite ground stations with dish antennae smaller than 3 meters, and related network equipment. Gilat has customers in over 85 countries. Its products are primarily sold to communication service providers and operators that use VSATs to serve enterprise, government, and residential users. The company also provides services directly to end users in various market segments in the United States and Latin America. The Company competes with Hughes Network Systems, Viasat, Inc. (NASDAQ: VSAT), iDirect, AT&T, Inc. (NYSE: T), Verizon Communications (NYSE: VZ) and Qwest Communications International Inc. (NYSE: Q).

Investment Thesis

Gilat focuses on niche markets within emerging markets and the government sector, with a lot of opportunity for new deal flow in markets like Africa, Latin America, and Eastern Europe. A recent win with the US. Postal Service could be a good springboard to more deals of the sort. In the deal, Gilat's wholly-owned subsidiary, Spacenet Inc., is working with Verizon Business to deploy a custom satellite network for the Postal Service. The satellite network will provide high performance broadbandcommunications for over 5,000 Postal Service sites in the continental United States, Hawaii, Alaska, and Puerto Rico.

Globecomm Systems Inc. (NASDAQ: GCOM), provider of satellite-based communications infrastructure, including both hardware and software, hit a high for the year on 15 October, closing at $16.04, up $0.91 for the day. The rise in stock price comes on the heels of two recent contract awards. Globecomm has joined with the National Hockey League (NHL) to provide streaming feeds of up to 30 simultaneous games to subscribers of NHL's Center Ice package. In a completely different venue, Globecomm also won a contract from the National Oceanic and Atmospheric Administration (NOAA) to build a networked prototype so that all weather-related information, particularly information on hazardous weather, can be merged into one location.

As a results of these contracts, and the acquisition of Global Sat earlier in the year, Globecomm posted a month ago record revenue for both fiscal 4Q 2007 as well as for FY 2007. For the fiscal 4Q, Globecomm posted revenues of 49.2 million, an increase of 38%. Revenue is divided into 2 segments: infrastructure solutions revenue, which was up 29%, and service revenue, which increased 77%. The results are the same for FY 2007. Revenue increased 20% to $150.7 million, with service revenue increasing over 28%.

CFO David Herschberg predicts that Globecomm will post record revenues of $190-$200 million in FY 2008, with diluted EPS of $0.70. Such rsults are entirely possible. Globecomm won part of a 5 year, $5 billion US Army telecommunications contract, as well as a NATO contract to develop a friendly-forces tracing system to prevent friendly-fir deaths. Globecomm has been in Asia constructing a $26 million media processing center. Although on a much smaller scale, Globecomm is beginning to rebuild the telecommunications infrastructure in Afghanistan, and bring wireless communications to rural Alaska.

The stock opened the year trading at $8.85 and is on its way to doubling in 10 months, with no signs of slowing down. In a few months, the current share price of $16 may seem like a real bargain.

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Sirius Satellite Radio Inc (NADSAQ: SIRI) reported solid results earlier this week, albeit slower than many forecast a few years ago.

For the June 2007 quarter, Sirius reported 561,000 net subscribers added, a 53% increase from last year's quarter. Sirius now has 7.1 million customers, adding 1.4 million net new adds in the past twelve months. Sirius still expects to hit the 8 million subscribers mark by year-end.

The majority of gross subscribers are now coming from the OEM market -- auto manufacturers. Seventy percent of subscriber growth came from the OEMs in the quarter. It appears the OEMs' desire to make satellite radio a standard feature in new releases continues as Chrysler announced that 70% of its new autos will have Sirius installed.

All told, the confusion around the Sirius and XM Satellite Radio Holdings Inc (NASDAQ: XMSR) merger makes a good entry point for an industry that is one of the higher growth businesses in the media industry. Also, it appears the political momentum is changing in favor of regulatory approval.

The satellite radio business is entering the seasonally weak period so a catalyst to drive this stock higher in the short term might be lacking, but the valuation is compelling and this is one of the few speculative stock plays that is on track to become a nice free cash flow generator.

As rumored for some time, the satellite operator, Intelsat Ltd., has been on sale. And, today we know who the new owner is: BC Partners, which is a top private equity firm.

The price tag? It's about $5 billion. Although if you add on the debt load (from a prior private equity deal), the amount comes to about $11.5 billion.

Interestingly enough, there were a variety of strategic parties that wanted to buy Intelsat, such as EchoStar Communications. Yet with dirt cheap debt markets, the private equity folks were able to put together higher bids.

Actually, it was back in 2004 that Intelsat entered a buyout deal – for about $3.1 billion. A year later, the firm purchased PanAmSat.

Basically, private equity firms like the rich cash flows of satellite companies. Also, the barriers to entry are considerable.

However the existing owners of Intelsat – which include Apax Partners, Apollo Management, Madison Dearborn Partners, Permira – will keep a minority stake. After all, in light of the growth in digital media and HD television, it's probably a good bet that Intelsat still has growth potential.

Tom Taulli is the author of various books, including the Complete M&A Handbook and the EDGAR-Online Guide to Decoding Financial Statements.

Inferential Focus, Inc. was the subject of Barron's interview this past weekend. This research driven company combs the world looking for new investment trends.

One emerging trend that could prove profitable for investors is the Department of Defense's need for a new generation of military satellites and communications networks in general. Technology exists, and could easily get into the hands of potential enemies, that can jam communications between U.S. spacecraft and ground stations by messing up the current DOD satellites that serve as central communications point for all these devices. A simple ground station based in any country could potentially mess up the communications of our military.

To solve this potential problem, the DOD has embarked on a $34 billion project to build a whole new global networking system similar to the Internet called GIG, or Global Information Grid. The DOD's goal is to make this network the most secure communications network ever to exist.

The companies that are going to benefit from this build-out are Globecomm Systems Inc (NASDAQ: GCOM), SAIC Inc (NYSE: SAI) and Radvision Ltd (NASDAQ: RVSN). My knowledge about these companies is severely lacking. Please send in comments if you know anything about this satellite build-out or these companies.

Sloppy is an accurate description of yesterday's conference call. The company shifted subscriber growth expectation out to 2008, saying XM Satellite Radio (NASDAQ: XMSR) is focused on the auto OEM and not the retail market. OEMs will begin to ramp XM Satellite services in greater numbers in 2008, management claimed.

Pushing growth out to 2008 for a so-called growth company in a so-called growth industry is not good. Also, converting customers from promotional periods to paying customers, or gross adds to net adds, remains low. Which has always been difficult to figure out in this industry.

It also came across that more and more of XM's success is based upon closing the deal with Sirius Satellite Radio (NASDAQ: SIRI). Although management attempted to say otherwise.

Management also went into some rambling about how it will always take care of customers that own older radios -- which was nice, but unclear as to why management emphasized this during the call. What are you going to do -- hang your customers out to dry?

Also, the top management change made last year appears not to be having the intended consequence. After XM started showing weakness in maintaining and getting subscribers in 2006, the satellite company brought in Nate Davis to get the company going again, but his arrival has done little to improve the outlook for this company.

Sirius releases earnings this morning. This Fly has been recommending buying Sirius on weakness and staying away from XM for a long time. Hopefully, Sirius does not push its growth targets out till 2008. We will see.

MAJOR PAPERS:

• The Wall Street Journal reported that the expiration of Roche Holding's (OTC: RHHBY) Tamiflu stockpiles poses a dilemma for some poor Asian countries of whether to spend millions and restock with the drug.
• The Financial Times wrote that China has launched its first navigation satellite.

OTHER PAPERS:

• The Associated Press reported that Michael Dell outlined corporate changes in a company wide email, and said he will "quash" bonuses for 2006, reduce managers, would not hire a new COO, push for faster product development and expand into new businesses at Dell Inc (NASDAQ: DELL).
• The New York Times reported that Simon Property Group is expected to bid $1.56B for Mills Corp (NYSE: MLS).
• The Los Angeles Times reported that General Electric Company's (NYSE: GE) NBC Universal will name Jeff Zucker as its new CEO this week.
• According to the Detroit Free Press, DaimlerChrysler AG's (NYSE: DCX) Chrysler Group may cut up to 10,000 jobs next week.

Both Sirius Satellite Radio Inc. (NASDAQ: SIRI) and XM Satellite Radio Holdings Inc. (NASDAQ: XMSR) rallied big yesterday. Momentum in both of these stocks is picking up as analysts publish reports on the merits on these two companies combining.

Even more attractive is news that Sirius is saying it expects advertising revenue to hit $60 million. Advertising revenue is almost all free cash flow for Sirius.

Also, Sirius expects to have its service pre-installed with a bunch of new car models this year. Add to this the fact that Sirius should be free cash flow positive this year and is on target for $1 billion in free cash flow by the end of this decade, and this rally could have legs and last for a while.

MOST NOTEWORTHY: The cable & satellite sector, Broadcom Corp 'A' (BRCM) and Hansen Medical (HNSN) were the most notable initiations this morning.

• Goldman Sachs views the cable & satellite sector favorably and was positive on cable given expectations for multi-year ROIC expansion. Comcast Corp 'A' (NASDAQ: CMCSA) was given a Buy rating from a Neutral and is Goldman's top pick. Cablevision Systems 'A' (NYSE: CVC) and EchoStar Comm (NASDAQ: DISH) were both rated Neutral.

• Broadcom Corp 'A' (NASDAQ: BRCM) was initiated with a Buy rating and $15 target at Webush; the firm believes Broadcom still has ramping product cycles to drive growth and also feels revenues are likely to accelerate on a year-over-year basis beginning in June 2007.

• Leerink Swann initiated Hansen Medical (NASDAQ: HNSN) with an Outperform rating and $17 target, noting their survey showed significant interest in remote navigation by EPs.

OTHER INITIATIONS:

• RBC Capital Markets initiated SiRF Technology Holdings (NASDAQ: SIRF) with an Outperform rating and $34 target, positive on SiRF Tech given its strong market growth driven by a significant increase in the GPS attach rate, slower erosion in the company's dominant market share and improving margins.

• Wedbush initiated shares of Marvell Technology Group (NASDAQ: MRVL) with a Hold rating and $20 target, as the firm finds shares fully-valued relative to the company's 2007 and 2008 earnings power.

Analyst summaries provided by TheFlyOnTheWall.com (subscription required).

A lawsuit was filed late last week that has Time Warner Inc. (NYSE: TWX) suing DirecTV Group, Inc. (NYSE:DTV) over deceptive trade practices and false advertising about the NFL Network. The suit filed in Manhattan, with unspecified damages sought, claims that DirecTV was trying to lure away customers from Time Warner Cable by lying about accessibility of pro football broadcasts in local markets.

It cited newspaper advertisements claiming that the Dec. 30 game between the New York Giants and the Washington Redskins will not be available to 4.4 million people around New York unless they join the DirecTV network, yet Time Warner Cable said the game will be available to its customers in New York on WNBC-TV regardless of if they have DirecTV or not. Time Warner also notes that the same sort of trickery has occurred in Green Bay, Cincinnati and elsewhere.

The suit also says that the satellite provider used ads with Jessica Simpson and William Shatner saying that HD TV was better on satellite, when both can be the same. DirecTV apparently ran these ads after agreeing to change them.

What Time Warner didn't say was that if this news broke simultaneously on cable and on satellite TV, you would have gotten the news 3 to 5 seconds faster via cable than via satellite. Time Warner Cable should do a commercial showing a "Bandwidth Taste Test" with a recording of a live broadcast on cable versus on satellite. If you are a trader in the markets or involved in the media, you cannot afford that delay in satellite TV.

This suit will almost certainly not involve monetary awards for Time Warner, but it shows that Satellite TV may have to use a little trickery to win cable subscribers these days.

On CNBC's MAD MONEY, Jim Cramer hosted Sirius Satellite Radio Inc. (NASDAQ:SIRI)'s CEO Mel Karmazin. As a reminder, Cramer was positive once already this afternoon on his STOP TRADING segment on CNBC. Despite rumors of a deal between Sirius and XMSR Satellite Radio Holdings (NASDAQ:XMSR), Mel said he doesn't need to merge ... but, the company would do what is best for shareholders.

Cramer earlier said the stock could go to $5.00 or higher on its own and could go to $8.00 in a merger situation, and touted the company's third quarter as good. In his opinion, the company will make money in two years. If he had to describe the stock in a phrase, it would be "growth at a reasonable price."

While talking to Karmazin, Cramer noted that having Howard Stern has worked, as they have added over four million subscribers during Stern's tenure with the company. Cramer asked if NASCAR could be as big as Stern, in terms of growth, for Sirius next year. Karmazin said he thinks many will buy the service solely for NASCAR, so yes. With regards to the soft retail market, Karmazin said it certainly has quieted down, but he thinks the holiday season will be gangbusters like last year. Karmazin did admit that his company hasa lot to do to hit its year-end numbers, but still believes Sirius will hit cash flow positive next year on $1 billion in revenues, if it hits targets.

Compared to terrestrial revenues, SIRI is behind only Clear Channel Communications, Inc. (NYSE:CCU) and CBS Corporation (NYSE:CBS) in listeners and will be the third largest or fourth largest radio entity next year after only having four years of operations. He said they will do $3 billion in revenues by 2010. He wants ad revenue about 10% of total revenues, or $100 million next year. Karmazin said there could be a value created in a merger, but they would rather go it alone as they are still adding more partners. He would be open to making an acquisition if it helped shareholders.

Cramer said he thinks that the stock can make a 50% move from here.

Jon Ogg is a partner in 24/7 Wall St., LLC; he does not own securities in the companies he covers.

Globalstar, Inc. (NASDAQ:GSAT) increased the amount of shares offered in its IPO from 6.5 million to 7.5 million of common stock and has priced it at $17.00 per share. All of the shares are being offered by Globalstar.

Wachovia Capital Markets and J.P. Morgan are serving as joint book-runners; Jefferies is serving as co-manager of the offering. The underwriters were granted a 30-day option to purchase up to an additional 1,125,000 shares to cover over-allotments.

Globalstar hopes this IPO would fund the launch of its second-generation satellite constellation, as well as necessary upgrades to its gateways and other ground facilities.

Globalstar is the re-emerged IPO of the old Globalstar (with the old ticker GSTRF) that came out of bankruptcy. It is the nearly-global satellite phone and data transmission company. It has almost 200,000 activated satellite voice and data units in more than 120 countries. Globalstar customers include companies in the oil and gas, mining and forestry among many others as well as government and individual recreational users.

Via Orbitcast found this extensive ongoing study of the satellite radio wars that Bridge Ratings is conducting. The study is updated on their site weekly, more or less. Its purpose is to "analyze consumer preferences related to satellite service brand and satellite radio in general." Lots of data to mine for chart, graph and stats junkies. The study compares brands XM Satellite Radio Holdings Inc. (NASDAQ: XMSR) and Sirius Satellite Radio Inc. (NASDAQ: SIRI). Right now the group sees a trend of new sat radio subscription numbers dropping, and predicts that interest in satellite both XM or Sirius) . Bridge is having more trouble finding shoppers willing to participate in their surveys, as the Orbitcast piece notes.

One interesting stat is one tracking the percent of new Sirius subscribers who list the main reason for their choice as Howard Stern throughout the current quarter. Data polled on 9/25/2006 showed 18% chose Sirius for Stern-- down from a high of 31% on 7/29/06. The earliest polled date this quarter Stern was the reason of choice for 19%. Bridge estimates that 15% of Q3's news subs are directly because of Howard Stern.

XMSR announced at the end of last week that close to 400k new subscribers came aboard during the second quarter, bringing XM's total subscriber count to 6.89 million.

"As we previously indicated, subscriber growth in the second quarter was limited by product availability and overall softness in the retail channel," said Hugh Panero, President and CEO, XM Satellite Radio. "As we approach seven million subscribers, however, satellite radio continues to be one of the fastest growing consumer entertainment products."

The company has scheduled a conference call on July 27, 2006, at 10:00 AM ET to announce and discuss its financial results for the second quarter of 2006.

XM has been busy adding name-brand personalities to its already star-speckled line up, a continuing effort to draw new listeners to XM's side of the satellite radio market. The much anticipated arrival of Oprah Winfrey in September, and the recent addition of Willie Nelson, are hoped to buoy soft sales heading into the last half of the year.

It remains to be seen how effective the Harpo machine will be in drawing subscribers to XM. Oprah seems to turn everything she touches into gold but, I'm just hoping, for the sake of my own santiy and that of the other 6.89 million XM subscribers, that she doesn't decide to bring Dr. Phil with her.

[Photo by miramb]