Comsat records another loss Bethesda firm loses $11.5 million, or 2per share for quarter

February 22, 1997|By Timothy J. Mullaney | Timothy J. Mullaney,SUN STAFF

Comsat Corp. reported the latest in a string of disappointing quarterly results yesterday, saying it lost $11.5 million in the fourth quarter of 1996.

The loss sparked a tart reaction from Wall Street. Comsat shares fell 87.5 cents to $24.

"It sounds like a broken record; it's the same deal every time," said Phil Wahl, an analyst for Standard & Poor's Corp. in New York. "Most people were way off. They were expecting a marginal loss."

Instead, the Bethesda-based satellite communications firm delivered a deficit of 24 cents per share. The company made a $17.1 million profit in the fourth quarter of 1995.

Comsat blamed the bulk of the earnings surprise on a $9 million loss on what it called "certain long-term contracts" within its satellite and wireless phone network manufacturing business.

The company also showed a $27.7 million operating loss in the fourth quarter in its entertainment businesses, which include the Denver Nuggets basketball team, the Colorado Avalanche hockey franchise and the newly acquired SpectraVision hotel movie service.

Comsat sold 19 percent of the entertainment businesses to the public last year. The unit trades on NASDAQ as Ascent Entertainment Group Inc.

Ascent lost $12 million on operations in the fourth quarter of 1995, but Ascent has been a persistent problem for Comsat, which is studying whether to sell the rest of the company, or spin off its remaining 81 percent stake to Comsat stockholders.

Janet Dewar, a Comsat spokeswoman, said the firm expects to decide what to do about Ascent "very soon," and plans to implement the decision by the end of the second quarter. Ascent stock has fallen by half since Comsat hinted at restructuring plans last year -- despite reports that several companies, including Nike Inc., were interested in the teams

Even Comsat's core communications businesses are not doing well, Wahl said. Operating income in telecommunications businesses fell to $17.1 million for the fourth quarter, from $32.4 million in the same quarter of 1995.

For all of 1996, Comsat said it earned $8.6 million, or 18 cents a share. In 1995, it earned $37.8 million, or 79 cents a share. The earnings dip forced the July resignation of former Chief Executive Officer Bruce L. Crockett, the chief backer of Comsat's entertainment strategy.

"It's one thing to be diverse, it's another thing to be scattered," jTC Wahl said. "I think it was much worse than expected. I don't think it's going to get any better."

Pub Date: 2/22/97

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