Posted on 07/02/2002 12:38:24 PM PDT by anymouse
Satellite communications firm Loral Space & Communications Ltd. on Tuesday slashed earnings and revenue expectations due to the drought in telecommunications spending, and its shares plunged by nearly 40 percent to a seven-year low.
Loral's debt also took a hammering as its bonds fell 20 cents on the dollar across the board, traders said.
The New York-based company, which sells satellites and satellite communications services, said it would not be able to achieve profitability in late 2003 as previously forecast, but dismissed analyst concerns it was headed for bankruptcy or delisting.
"We're not concerned about bankruptcy ... We're not aware of concerns about delisting," Loral Chairman and Chief Executive Bernard Schwartz told analysts on a conference call.
Although the company's share price has plunged well below the New York Stock Exchange $1 minimum trading requirement, Schwartz said the stock market also looks at sales backlog and operating and financial issues, which he said are not problems.
Loral shares were down 34 cents, or nearly 35 percent, at 64 cents on Tuesday afternoon, off an earlier low at 60 cents. Its shares have fallen by 68 percent so far this year.
The company, which has been hit hard by a slump in telecommunications and a downturn in satellite demand, did not indicate how soon it foresees profitability.
Vijay Jayant, an analyst with Morgan Stanley Dean Witter, said the company's earnings warning heightened his concerns about Loral's liquidity position.
"Managing growth and liquidity has always been my concern with Loral," Jayant said. "What happens in 2003? How are they going to run their business?"
Loral said it still expected to end the year with $80 million to $90 million in cash and available credit after capital spending of $160 million.
"All our covenants are covered," Schwartz said, in response to analyst concerns about Loral's ability to meet its debt covenants. "We don't think it will be a bumpy year (regarding) covenants ... As the economy improves, we should improve."
The company said it now expects a full-year loss of $190 million, or 50 cents a share, compared with its previous forecast of a loss of 40 cents to 50 cents. The new estimate includes a charge of 11 cents per share related to preferred securities but excludes a goodwill charge.
Loral posted a loss of $276 million, or 86 cents a share, in the previous year.
BLAMES MUCH OF SHORTFALL ON ITS SKYNET BUSINESS
Loral said it expects revenue of $1.2 billion for 2002, a 15 percent increase over last year but lower than its previous forecast for a 20 percent increase.
The company blamed much of the shortfall on its Skynet satellite services business, which it said has been hurt by the economic slowdown and delay in demand for new applications and services, especially high-speed data services.
Loral still expects revenue from its satellite manufacturing business to increase 20 percent based on expectations that satellite construction will pick up later this year.
But that recovery has not yet materialized. Loral said only one order was placed across the industry for construction of a new commercial geosynchronous satellite in the last nine months, compared with a total of 25 orders during 2001.
William Kidd, an analyst with Lehman Brothers, said, "Although the manufacturing business is large, Loral's equity story is driven by the satellite services business. The fact that the Skynet guidance is so much weaker is pretty disappointing."
Loral said earnings before interest, taxes, depreciation and amortization, or EBITDA, would be down about 5 percent from 2001's $223 million, compared with previous expectations for a 15 percent increase. Analysts on average were expecting EBITDA of $271.1 million for 2002, according to research firm Multex.
Loral now expects Skynet revenue in 2002 to decline to $340 million from $389 million in 2001, contrary to expectations for single-digit growth. Skynet EBITDA is expected to decline about 15 percent from $276 million last year. (with Yukari Iwatani in Chicago)
I do not need to ask questions regarding the conduct of projects within the defense industry. The contracts at Hughes Aerospace, Rockwell, Northrop, MDAC, Boeing, Lockheed, TRW, and, yes, Loral were granted through a political process.
During the late 1990's our area saw massive lay-offs, collapse of defense production lines, and substantial economic downturn at the hands of those who PROFITTED at Loral.
It is not a callous attitude to hold individuals accountable for their poor judgement. I have seen many HIV/AIDS patients who feel they are entitled to government grants and assistance after THEY CHOSE to engage in unsafe sexual practices. I have seen many ABORTIONS under government funding from liberals because they "feel" it is correct.
I have seen a failed President proclaim his innocence while the employees at Loral CHOSE to support his campaign.
Loral employees were bots and they chose to be used in that fashion by their CEO. THEY CHOSE POORLY!
Regarding your assertions regarding Loral.
1. LockMart does not hold majority control of Loral and Bernie-boy was the one who controlled the tech-leaking direction of Loral. Lower-level management and the Board of Directors should have reviewed "Bernie's" ideas, but all utterly failed in their corporate responsibilities. They also compromised our nation due to their "not my responsibility" attitude.
2. Skynet was developed by a different company and was only acquired to "diversify" the finances.
3. Regarding commercial satellite development, the technology used to orbit a satellite is also the technology to drop a warhead on my house! Boeing/Hughes did not go blabbing about third stage orbital insertion mechanics to communists building nuclear missiles. Loral engineers DID!
Lastly, my comments are NOT flippant. I've been watching these guys at Loral compromise our technology since they were posting at sci.space in the early 1990's. When engineers are posting about technology transfer, is there any wonder why Dana R. can run to the floor of the House of Rep's and give voice to these concerns????
Each citizen must take personal responsibility for their deeds. Loral's employees, just like the people at Enron, Arthur Andersen, Worldcom, InClone (and soon to be Pacificare/Wellpoint/and more), failed to do the right thing.
They should have held their officers accountable.
(not much else to add to your great statement of fact.)
Because you know ALL the facts? I note from your various other postings you like to demand sources and facts from those you disagree with. You seem to be an expert on the military/aerospace industry as well as the medical field, vaccines, oriental politics, what else? Yet you cast accusations at unnamed low-mid level employees without citing a single reference, make many factual errors in your claims, and considering your political leanings, chose to divide the conservative members that I believe you include yourself in the same way I might expect a liberal to do.
It is not a callous attitude to hold individuals accountable for their poor judgement.
Sort of like saying ALL Enron employees were guilty, (I know a few GOOD folks that lost their jobs due to the mismanagement there), or all WorldCom employees knew that skimming was taking place, or all the employees of banks of the S&L scandel knew. How many thousands would you like to see suffer so that you can feel like justice was done when the fat cats got away anyhow? Why would a Loral employee be any more malicious than any other company? BTW Hughes was also charged in the China affair. What is your position wrt that company? Your comparison of an employee who choses a job based on his/her interests, skills and ambitions, location, family obligations, etc, with every intention of following law, to an HIV patient who chooses to engage in unsafe sex is a poor parallel. And I fail to see at all the point wrt to this posting your comment about abortion.
Factual error 1: contracts at Hughes Aerospace, Rockwell, Northrop, MDAC, Boeing, Lockheed, TRW, and, yes, Loral were granted through a political process...
Since pre-1996 when Loral sold off all its interest except its space systems division aquired from Ford Aerospace previously, Loral ceased to be a "defense contractor". The companies contracts were competed and the only govt contact outside of small NASA studies was the GOES weather birds, competitively bid.
2:substantial economic downturn at the hands of those who PROFITTED at Loral.
While no doubt Bernie and a few corporate friends profited, it would be premature to blame any single companies misdealings for an economic downturn.
3:failed President proclaim his innocence while the employees at Loral CHOSE to support his campaign
the CEO yes, employees, some for sure, others definitely not. But again now you condemn some just because of political leanings as opposed to intention illegal activity. Are you a conservative or a fascist? What is the political landscape of any company?
I will sum up all the other inaccuracies by saying that Skynet was aquired from the proceeds of the sale of the Loral defense arm to reposition the company in the commercial market where the corporate thought its profits margins would be better (than the then downsizing defense industry) and because the profits in commercial space turn out to be primarily in the service provider, not the satellite maker. Satellite builder profit margins are very small even in good years. Finally, SS/L is not a launch vehicle manufacturer and the protocol that was broached by 'an individual' no longer employed had nothing to do with rockets/third stage orbit insertion. It had to due with releasing without Govt approval of a failure analysis report of the Long March III failure in Feb 1996. That particular employee was 'removed' shortly following the event and I would blame the then Clinton govt for never prosecuting him. You know a lot less than you think with regard to this.
Blame Clinton/Bernie/greedy wall streeters all you want. Blame the criminals who committed the offense and blame those who failed to prosecute them. Lay off the white and blue collar workers that make up the horsepower that drives the economic engine of this country and want nothing more than what any other patriotic american wants, the opportunity to make the life of his/her family better, the opportunity to contribute to society and country, and the pleasure of doing so at a job you enjoy.
Each citizen must take personal responsibility for their deeds.
If I thought the company I worked for was engaged in illegal activities, particularly where national security was concerned, I'd blow the whistle in a minute. Your insinuation is that patriots like myself who are employed at Loral would not is both slander and insult. But reading some of your previous postings, you seem practiced at it.
I am going to celebrate Independence Day now and I wish you and all a happy and safe weekend. Perhaps, indignation aside, you will find in the future that we do not see that far apart on most issues.
PS - I am guessing by your screen name and other posts that your in the medical field. I just want to say I would never similarly wish your hospital/place of employment is shut down putting hundreds of dedicated medical professionals out of work because a few corporates who run that system live off my tax dollars, medicare, other mismanaged govt spending, etc and manage to 'lose', fail to account for, or bilk the insurance companies for millions every year.
You appear practiced and seasoned at defending the indefensible policies of Loral. My comments were specifically targetted at you and your colleagues who CHOSE to work at Loral. It is the workers at a company who CHOOSE to engage in work at a company. The defense that "I was just following orders" does not compute. The fact is that engineers at Loral were actively paid by their company to transfer technology to the PRC. When I hear people attempting to defend the ABUSIVE antics of a ridiculously hypocritical management, it is a lark. Wake up!
Since you request quotes and facts (something that is sometimes lacking in the trenches of engineering firms), let me quote the Cox Report on this matter.
By agreeing to procure numerous satellites from Hughes Electronics Co. (Hughes) and Space Systems/Loral (Loral) in the early 1990s, the PRC created a mutuality of interest with two companies well-positioned to advocate the liberalization of export controls on these platforms.
For example, Bernard L. Schwartz, Chairman and CEO of Loral Space & Communications, Ltd., the parent company of Loral, met directly on at least four occasions with Secretary of Commerce Ron Brown after 1993, and accompanied him on a 1994 trade mission to the PRC.113
C. Michael Armstrong, the former Chairman and Chief Executive Officer of GM Hughes Electronics, the parent company of Hughes, has served as Chairman of President Clinton’s Export Council since 1993, working with the Secretary of State, the Secretary of Commerce, and others to "provide insight and counsel" to the President on a variety of trade matters.114 Armstrong also serves or has served as a member of the Defense Preparedness Advisory Council, the Telecommunications Advisory Council, and the Secretary of State’s Advisory Council.115
Both Armstrong and Schwartz, as well as other executives from high-technology firms, advocated the transfer of export licensing authority from the "more stringent control" of the State Department to the Commerce Department. Armstrong met with the Secretary of Defense, the National Security Advisor, and the Secretary of State on the matter, and both Schwartz and Armstrong co-signed a letter with Daniel Tellep of Lockheed Martin Corporation to the President urging this change.116 The changes they advocated were ultimately adopted.
Between 1993 and January 3, 1999, Loral and Hughes succeeded in obtaining waivers or export licenses for an aggregate of five satellite projects.117
Regarding the awards and merits involved with satellite deals (which you appear to deny), there is CLEARLY a political process at play. My conclusion is that you are either attempting to deceive us or you are attempting to deceive yourself. If you are an engineer, you are in denial. If you are in executive management, you're a liar. Anyone with any managerial experience in aerospace or engineering KNOWS that politics played a role in the prosperity of Loral and the demise of virtually every other company around it.
Regarding Hughes, their company has benefitted from sales to Boeing. Prior to having Boeing's leadership, it was obvious that the Hughes leadership was selling technology to the very regimes that are now pointing their missiles at us.
Regarding your denial of technology transfer regarding third-stage orbital insertion techniques (which are the technologies required to MIRV tip a nuclear missile), you are also incorrect. The fact is that the Long March failures were investigated by Loral and Hughes teams. The fact is that Loral and Hughes gave high-level support for those initiatives. This was not a simple case of "one engineer" having excessive verbosity. This was a case of several corporations specifically aiding and abetting a regime with obvious antagonistic attitudes towards our nation.
Quoting the Cox Report from http://www.house.gov/hunter/CoxReport-sat-loral.htm.
The Defense Department assessment concluded that "Loral and Hughes committed a serious export control violation by virtue of having performed a defense service without a license . . . "
The State Department referred the matter to the Department of Justice for possible criminal prosecution.
The answer is clear. YOU CHOOSE TO WORK WHERE YOU ARE. Don't go complaining about management. If you really are that conservative and that patriotic, don't work for a company that exports our technology to the PRC!
With respect to hospital shut downs, look around Los Angeles and look what the Clinton-Gore-Davis people have done to healthcare in your area. Your health care system IS being shut down by the EXACT same people who sucked millions from Loral.
Happy July 4th... I hope you can become more independent from the people at Loral. There will be plenty of job opportunities created by the Bush/Cheney BMDO projects....that is ... if you have correct security clearances.... but then again... you CHOOSE to work at Loral...
By the way, how's those Oracle DB's and Sun Sparc Stations over there?
I will clarify, hopefully for the final, time my position. But even before that I wish to clear up a few of your misconceptions about me. You assume that I now work for Loral. I never said I did or did not. I have worked for or with three commercial companies and three government offices (NASA, SPAWAR, and NRO) in the last 11 years, both as a government technical rep (while on active duty) and as an engineer (post military career.) I am not management. I am a senior engineer and have led technical teams and major programs. I have worked both in and out of the 'black' world, so you needn't concern yourself about my clearance. I help develop and implement the technologies that keep our nation leading in aerospace. I do not give those technologies to anybody. Now to your response...
First, I neither defend illegal practices nor those that perpetrate them. When greedy wallstreeters can 'purchase' favor from corrupt politicians, both should be called to the carpet. In this case, a senior manager (who fyi was of asian decent) with or without consent of corporate (I don't know) picked up a failure report, part of a normal insurance investigation after the long march failure, walked across his office and faxed it to an office in the PRC without consulting with the defense dept tech tranfer office. For that, besides the subsequent removal of this person, the company was fined roughly $10 million by the very govt that as you point out was complicite in helping them create the chinese relationship that was being formed between Clinton and Bejing. Everything that occured up to the unforeseen faxing by said individual was legal. No one below said individual knew or could have known the actions he would take without authority.
With regards to political processes in satellite awards, you are correct that govt approval is required for export liscense. However the contract must be won by the company like any other business activity and the govt does not match up customer with preffered contractor. My comment was that Loral competes fairly to win those awards.
You have properly identified the true perpetraitors via the Cox report, Schwart, Armstrong, and Tellep in collusion with Ron Brown and Clinton managed to swindle the entire country into thinking that relaxing export controls (and allowing such security gaps that occured in both this industry and others such as computer inustry and the national labs) was good policy. Again, they should be hung for this. But I continue to disagree with you that good employees with niether knowledge of the illegal acts or the ability to influence national policy of the time should be scorned by fellow Americans.
Hughes' aquisition by Boeing has less to do with its misdemeaners in the Chinese affair than industry consolidation and Boeings desire to enter the satellite market. For what its worth, it is not unlikely that Loral will be aquired Lockheed in the near future. Would that aquisition suddenly release the employees from the focus of your anger?
I personally think the military activities in Bosnia by the US under Clinton were illegal, yet I can not fault the soldiers, sailors, and airmen who carried out what they believed to be orders in the interest of national security as the then administration would claim. What happened at Loral was far less obvious to all but a very few, but I hope you see the parallel.
As to the hospital shutdowns, I wish only the best for those decent hardworking med professionals displaced by the greed and illegal activity of superiors.
Your phrasing suggested that you are an employee of Loral.
In total, most of your comments are correct. However, your specific recollection of the events surrounding the leakage of US technology to the PRC is troubling. The Cox report was clear in their characterization of multiple failures within both Loral and Hughes.
In essence, your attempt by "employees" to waive guilt-by-association is kind-hearted, but will not create the societal change required to defend our liberty. Social change occurs from the middle-class. The middle-class IS the work force who CHOSES to work for Loral and similar companies.
Only when Americans take personal responsibility in their own decisions that we will have protection from people like Schwartz.
Perhaps. I hope your feelings in this matter are at least as strong as your feelings with regard to American voter decisions to elect Bill Clinton president not once but twice. And I hope you would not blame those of us who voted otherwise (Bush 92/Dole 96/Bush 2000 in my case) for the eight years of scandel, national security failures, and embarrasment that plagued the nation because of he and his anti american lawyer friends. I suspect you do not. I hope you at least see the inconsistancy in your posiion towards the "employees".
Enjoy the remainder of the holiday.
FRegards,
The election of Bill Clinton was testimony to the lackluster Bush41 campaign and the populist spirit of Perot's gang. Perot basically wanted to prevent a second term of Bush41. He succeeded in convincing 1/3rd of the nation that Bush should not be re-elected.
If the DNC introduces a populist 3rd party candidate to run on a conservative platform and swing enough votes from Bush43, they could recapture the White House. Certainly Ralph Nader is an unlikely recipient of my praise for running in 2000. Nader likely is responsible for swinging enough Gore votes in Florida to change the election results.
I never criticize the outcome of fair elections. When the people speak, they have made their verdict clear. There was no question that Bush 41 lost the confidence of the American people because of the glitz and glamour techniques of the liberals in the DNC and their celebrity pool.
I hold these actors (more like clowns) responsible for their conduct. Their duplicity in Hollywood is not unlike the guilt by association that occurs when the gunner claims the commandant made them do it.
The reality is that the excuse of following orders didn't work at Nuremburg but many appear to think that it should. If more German citizens had arisen in the late 1920's, one wonders if the racist policies of the Nazi's would have occurred. One wonders if the Holocaust would have occurred if citizens in Germany were permitted freedom of thought, identification of propaganda, and open public discourse while the Final Solution was being drafted.
I see little difference between the activity of the propagandists at DNC and of the early Nazi party. The propaganda techniques are virtually identical. They both use film to alter the nation's culture. They both have racist public policies in their attempts to do social engineering and selective vote acquisition.
Take care and thanks for the interesting discussion.
The election of Bill Clinton was testimony to the lackluster Bush41 campaign and the populist spirit of Perot's gang. Perot basically wanted to prevent a second term of Bush41. He succeeded in convincing 1/3rd of the nation that Bush should not be re-elected.
If the DNC introduces a populist 3rd party candidate to run on a conservative platform and swing enough votes from Bush43, they could recapture the White House. Certainly Ralph Nader is an unlikely recipient of my praise for running in 2000. Nader likely is responsible for swinging enough Gore votes in Florida to change the election results.
I never criticize the outcome of fair elections. When the people speak, they have made their verdict clear. There was no question that Bush 41 lost the confidence of the American people because of the glitz and glamour techniques of the liberals in the DNC and their celebrity pool.
I hold these actors (more like clowns) responsible for their conduct. Their duplicity in Hollywood is not unlike the guilt by association that occurs when the gunner claims the commandant made them do it.
The reality is that the excuse of following orders didn't work at Nuremburg but many appear to think that it should. If more German citizens had arisen in the late 1920's, one wonders if the racist policies of the Nazi's would have occurred. One wonders if the Holocaust would have occurred if citizens in Germany were permitted freedom of thought, identification of propaganda, and open public discourse while the Final Solution was being drafted.
I see little difference between the activity of the propagandists at DNC and of the early Nazi party. The propaganda techniques are virtually identical. They both use film to alter the nation's culture. They both have racist public policies in their attempts to do social engineering and selective vote acquisition.
Take care and thanks for the interesting discussion.
It didn't go over $1 Wednesday. LOR closed at 72 cents.
I believe Schwartz has under two weeks to get LOR above a buck or he is outta there.
The SEC shold investigate this "contract" and see who made what on that 10% jump in price.
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