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 bet the ChiComs sweep in to pick up the crumbs after Loral goes belly up.
Of course even this financial loss is a small consolation to our loss of national security brought on by Loral misdeeds.
Hmmm....I am sure that I will see this tonight on the network news.
I think that W's name (or reference to the administration's "favoring corporate welfare") was in about the second or third paragraph of just about every Enron/WorldCom/Tyco story I have ever seen.
Isn't that just weird? But there's no liberal bias in the media, right?
More like a slump in fire sales of critical US secrets to the Chinese.
And it's no surprise they did "not indicate how soon it foresees profitability", because they're not sure how soon a criminally corrupt Democrat would be back in the White House. They must not have much confidence in Hillary.
To learn that Bernie, genuine human filth, betrayer of our national security, is in deep doo-doo with his company warms my heart. It is like a marvelous piece of justice falling down upon genuinely gross and greedy people. Simply amazing.
It would be interesting to learn of the 'true' donations as well as favors received by companies so closely associated with the clintons. Looks as if the cheating that went on is coming home to roost. Good.
Guess the Democrats are losing out on their "favors" for companies who supported Clinton.
Clinton's legacy is being played out now in America and across the world.
During his Administration, there was, as someone here said, "a casual downgrading of the U.S. military and intelligence forces, a grievous error that, as we now know, seriously damaged Washington's ability to protect the U.S. and its allies."
On the talk shows this week, there is talk about the Democrats' current efforts to try to link Bush and the Republicans to the Enron/WorldCom/Xerox scandals. Sorry, folks, that dog won’t hunt, as they say.
When you and your spin doctors tell us for eight (8) long years that personal honesty and character don't matter, and that a man's personal character has nothing to do with how competent and trustworthy he is on the job, there are certain dishonest types out here who will believe it and act on it. It will be interesting to see the extent to which it affected the honesty of school kids too.
Just as personal character traits--honesty, loyalty to principle, fidelity to trust, and ethical behavior--matter between family members and friends, it matters also between a CEO and his shareholders, employees, and customers; and it matters, even more, between a President and those to whom he is accountable--the people--as well as to the business leaders and foreign leaders who must know they should be able to rely on his word!
Eight years of dishonest and corrupt national leadership is now producing the fruits of such leadership. "We, the People," will have to bear the costs and the harm that ultimately results from allowing such a leader to poison the national well of thought for two full terms. The failures of Enron, WorldCom, Xerox, Arthur Andersen and others can be placed squarely on the lack of personal honesty and integrity of the men or women who were responsible for selfish and greedy use of power and the resulting harm to the rights of millions. They should pay the penalty of loss of personal freedom to do more such harm in their lifetimes.
By the same token, the former President of the United States and his spouse, whose personal lack of honesty and integrity and selfish and greedy use of power to advance themselves in a way that put the nation at risk, should be called to account for the example they set for the young and the old, and for the resulting harm they have caused to America and to generations yet unborn.
Too bad about the impact on Loral employees and the others, but companies that participate in giving aid to potential enemies of their country already have headed down a path with its own rewards.
Maybe that controlling legal authority is the market!
Here is the link to Yahoo's real time site for Loral: (Yahoo Realtime Loral Value)
It couldn't happen to a finer group. Now maybe some of these Loral rats will roll over and tell us what really happened re Loral sharing how to's to enable the ChiComs to target our cities with nuclear warheads.
Bernie Schwartz had a Loral stock and option holdings worth $245 million at the inaugration of George W. Bush
At today's price his holdings are now worth $7 million, and all his options are under water.
HaHa, pretty soon he won't even be able to buy a seat at a Clintoon speech. Bernie's a loser!
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