Comsat strengthened by rising sales, earnings

Satellite communications

July 20, 1999|By Mark Ribbing | Mark Ribbing,SUN STAFF

Comsat Corp., a satellite-communications company that is hoping to be taken over by Bethesda neighbor Lockheed Martin Corp., reported upturns yesterday in its second-quarter earnings and revenue.

Comsat had net income of $12 million, or 22 cents per diluted share, in the quarter ending June 30. This was nearly a tripling in net income over the $4.1 million, or 8 cents per diluted share, that the company earned in the same quarter last year.

Revenue was also up, with the company pulling in $155.9 million, 3.18 percent more than the $151.1 million garnered in 1998's second quarter.

Betty C. Alewine, Comsat's president and chief executive officer, attributed the increases in part to "strong growth" in the unit that sells satellite communications on the global INTELSAT network.

Comsat reported that this division of the company had a 23.08 percent increase in income and a 13.26 percent rise in revenue over the same period last year.

Philip Wohl, an analyst with Standard & Poor's in New York, said Comsat could make do even if the troubled deal with Lockheed Martin falls apart.

The Comsat-Lockheed Martin union, initially valued at $2.7 billion, has faced steep hurdles ever since it was announced in September. Since much of the transaction would be paid for in Lockheed Martin stock, the defense company's financial problems have raised questions about whether the purchase will proceed.

"Even if the Lockheed deal doesn't go through, [Comsat] has legs to stand on because of the strength of the satellite business," Wohl said. "It wouldn't be too far-fetched for [Comsat] to be picked up, if not by Lockheed, then by a telecommunications company."

Comsat shares were unchanged yesterday, closing at $35.9375.

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