US satellite manufacturer and operator Loral Space &Communications has warned that a slowdown in the telecommunications market will hit revenues and earnings this year and delay its return to profitability. Loral expects a 5% decrease in earnings, rather than the 15% increase originally forecast.
Return to net profit had been forecast for late next year. The net loss is expected to shrink from $276 million last year to around $190 million - still larger than earlier forecasts of $130-160 million.
Loral's Skynet satellite operating business has been hardest hit, with capacity utilisation expected to drop to 60% by year end, compared with 68% at the end of last year. In addition, lease rates for transponders have fallen 10%. As a result, revenues are now expected to decrease by over 12% and earnings by around 15%.
Revenues at satellite manufacturing business Space Systems/Loral are expected to rise 20%, while earnings are expected to jump by almost 70% after cost cutting. Loral expects a turnaround in the second half of the year.
Source: Flight International
