The attitude stabilization of an inertial-pointing underactuated rigid-body spacecraft using two torques under time-varying disturbances and inertia matrix uncertainties is examined. An observer-based time-varying output feedback control law is proposed where angular velocity measurements are not available. The stability of the combined controller-observer system is proven rigorously to show local ultimate boundedness of all states. A comprehensive numerical example is presented with sampled data implementation of the observer-based control law to demonstrate convergence even with very large initial attitude errors. (C) 2019 Elsevier Ltd. All rights reserved.