Loral Reports Third Quarter 1999 Financial Results - Company Financial Information

Cambridge Telcom Report, Nov 1, 1999

In addition, during the third quarter, SS/L launched two GEO satellites, Telstar 7 and EchoStar 5, the newest direct broadcast satellite for EchoStar's DISH Network. Just after the close of the quarter, SS/L launched Orion 2. Japan's MTSAT is to be launched later this year on the HIIA rocket from Japan. SS/L's GOES L (Geostationary Operational Environmental Satellite), the fourth and most advanced in the next-generation series of weather satellites built by SS/L for the National Aeronautics and Space Administration and the National Oceanic and Atmospheric Administration (NOAA), also is scheduled for launch in the fourth quarter.

The SS/L-built GOES-8, on orbit since April 1994, continued to exceed its mission life and in September provided critical images of Hurricane Floyd to NOAA. In turn, NOAA was able to provide important information to the National Weather Service and many other users. This allowed several agencies to issue storm warnings, watches and evacuation advisories in a timely manner.

After the quarter's close SS/L announced that, as system associate contractor with Mitsubishi Electric Corporation, it has been awarded a contract to build a high-powered communications satellite for Cable & Wireless Optus of Australia and the Australian Department of Defence. The Optus C1 will carry 18 antennas and four payloads. It is designed for a mission life of 15 years and is scheduled for launch in 2002.

Shipment of the ChinaSat 8 satellite continues to be delayed as a result of the temporary suspension of the export license by the Department of State. Loral has entered into negotiations with its customer to make accommodations for this delay in shipment, including the provision of replacement capacity to offset the costs incurred by the customer. Negotiations are expected to conclude during the fourth quarter. Notwithstanding any charge that may occur in the fourth quarter as a result of these discussions, Loral anticipates that it will be on target with its previously projected net loss per share for 1999.

Data Services Third quarter revenues for the Data Services segment, comprising Loral Orion and CyberStar, reached $22 million, a 70 percent increase over the same period last year. Revenues for the first nine months totaled $57 million versus $25 million in the prior year's nine-month period.

The Data Services segment further expanded its Internet infrastructure and access capacity during the third quarter. In August, Loral acquired Williams Global Access Services, a business television unit of The Williams Company, the communications and energy services company. The acquisition substantially increased Loral's business television (BTV) service offerings by combining the international audio/video networking capabilities of Global Access Services with the data networking and broadband distribution services of Loral Orion and CyberStar.

In September, Loral Orion expanded its global network and broadband services across South America when it was authorized to deliver domestic and international data communications services in Argentina, one of the largest markets in South America. Loral Orion is now able to operate across virtually the entire continent, offering the full array of broadband data services.