DULLES, VIRGINIA -- Orbital Sciences chief David Thompson reassured shareholders that better times are ahead for the company after a year of accounting missteps and unmet financial projections became a drag on the company’s stock price and earnings.

"We’ve experienced a financial headwind this past year and for the year ahead," he told shareholders at the company’s annual shareholders meeting on June 1. "But it will become a tailwind ahead for several years."

Last month, Orbital reported a smaller-than-expected first-quarter loss of $26.5 million, compared with $26.2 million for the same period a year ago.

In addition, its stock has been depressed, falling sharply from a peak of $45 in January 1999. By the market close, its stock was at $12.86, up 63 cents.

Orbital's stock takes a nosedive.

One major factor in the company’s poor financial results was its struggle to manage its finances, leading the firm to restate almost two years' worth of financial results. This quarter's results reflect changes in the company's accounting procedures, including how quickly it recognizes revenue from contracts.

At the company’s sprawling campus-like headquarters here, the key phrase tossed about was "unlocking shareholder value." Company officials believe that its technology, including satellites and rockets it launches for NASA and commercial ventures, is its key to success.

"After the failures of 1999, we are today a stronger and smarter company," Thompson said.

Analysts agree that the company does have the opportunity to turn things around in 2001 if they are able to stay on schedule with its plans throughout the year.

"There certainly is value there, but the best way to unlock it is to perform as planned," said Paul Nesbit of JSA Research in Providence, Rhode Island.

One area of concern made clear by shareholders at the annual meeting is the losses at the company’s two units, Orbcomm and Orbimage.

In particular, shareholders questioned Thompson on the number of units that Orbcomm has sold of its GPS-based navigation system installed in cars and trucks.

"[The units] were unreliable when they first started installing them," Nesbit said. "They have sold close to 250,000, but only 30,000 are actually installed."

But, Thompson defended the GPS-based units saying that they have put a team of engineers together to help out with servicing. "We have also increased the reliability of the units," he said.

Nesbit estimates that the company will have installed 100,000 total by the end of the year.

In addition to Orbcomm’s problems, the company has also been dragged down by losses in the development of its X 34 -- a reusable and un-piloted suborbital spacecraft.

There were also substantial losses in Orbital’s satellite business because of the expense in the development of 2 geosynchronous satellites subcontracted to Lockheed, Nesbit said.

"They also are running into cost problems on the OrbView 3 satellites which have been delayed for launch," Nesbit said.

Despite the bad news, Nesbit sees the potential for a banner year in 2001."The technology is there in spades," he said. "Since 1997, they have had 85 launches with zero failures."

"No other company in the world can say that," he added.