Comsat posts flat earnings for quarter, plans changes

July 25, 1995|By Ted Shelsby | Ted Shelsby,Sun Staff Writer

Comsat Corp., the Bethesda-based satellite communication and entertainment company, reported flat second-quarter earnings yesterday and also announced a restructuring aimed at improving the performance and market value of the company.

"Financially, our second quarter played out as expected as we continued our strategic investment program in both our communications and entertainment businesses," said Bruce L. Crockett, Comsat president and CEO, in reporting a 1.8 percent increase in earnings from a 1.4 percent gain in revenues.

Looking ahead, Mr. Crockett said, the "long-term success of our growth strategy, however, depends on an ability to remain strongly competitive in very dynamic markets."

He announced a three-pronged approach aimed at reducing costs and boosting the value of the company.

The plan includes:

* The hiring of Allen & Co. Inc. and CS First Boston Corp. to evaluate ways to unlock the value of the company's entertainment assets, including its National Basketball Association franchise and National Hockey League team.

The investment bankers will also look at ways to raise capital to fund entertainment growth opportunities.

* Subject to Federal Communications Commission review, the company wants to integrate its Comsat Mobile Communications with its other international communications businesses in Comsat International Communications (CIC).

Betty C. Alewine will continue as president of CIC. Three general managers will report to Ms. Alewine. John Mattingly and Bob Dupuis will continue to lead Comsat World Systems and Comsat International Ventures, respectively. The third general manager will be Chris Leber, previously vice president of operations in Comsat Mobile Communications (CMC). Mr. Leber has been promoted to vice president and general manager of CMC.

* With assistance from Ernst & Young LLP, Comsat is taking a fresh look at all its operations to determine how it can be more efficient and better serve its customers, said Joseph Tomkowicz, a company spokesman. Wall Street seemed to welcome the moves. Comsat shares rose 9.6 percent yesterday to close at $22.75, up $2.

Comsat Corp.

Bethesda ... ... ... ... ... Ticker ... ... ... ... ... Yesterday's

... ... ... .. .. .. ... ... Symbol ... ... ... ... ... Cls. ... ... Chg.

... ... ... .. ... ... .. .. CQ ... ... ... ... ... ... 22 3/4 .. .. .. +2

Period ended

6/30/95 ... ... ... ... ... 2nd qtr. ... ... .. ... Year ago ... ... Chg.

Revenue ... ... ... ... ... $210,800 ... ... .. ... 207,800 .. .. .. +1.4%

Net Income .. .. .. ... ... $22,000 .. .. .. .. ... $21,600 .. .. .. +1.8%

Primary EPS ... ... ... ... $0.46 ... ... ... .. .. $0.46 ... ... .. --

... ... ... ... ... ... ... 6 mos. ... .. .. ... .. Year ago ... ... Chg.

Revenue ... ... ... ... ... $418,700 ... ... ... .. $408,300 ... ... +2.5%

Net Income ... ... .. .. .. $36,600 ... ... ... ... $41,800 .. .. .. -12.4%

Primary EPS .. ... .. .. .. $0.77 ... ... .. .. ... $0.89 ... ... .. -13.5%

Figures in thousands (except per share data.)

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