Satellite Anomaly Causes Intelsat 3Q Net Loss


Intelsat, the largest global satellite company, reported revenue Tuesday of $528.5 million and a net loss of $172.5 million for the third quarter.

The company said its loss reflected both an asset-impairment charge of $49 million, to write down the book value of a satellite “that experienced an anomaly in September,” as well as $19.9 million in restructuring costs related to its acquisition of PanAmSat.

According to company officials, the “anomaly” entailed a satellite getting a bubble in its fuel line, prompting the bird to reorient itself to face the sun. The satellite was recovered and is now pointing to the earth again, according to officials.

The satellite in question mainly served Africa, and it lost two-thirds of its customer capacity, officials said. Those customers are either being served by the bird’s remaining one-third capacity or were switched to nine other birds.

Intelsat bought rival PanAmSat in July for $3.2 billion.

For the quarter, Intelsat registered EBITDA -- or earnings before interest, taxes, depreciation and amortization -- of $287.5 million.

With respect to the integration of PanAmSat, Intelsat expects to realize about $92 million in annual net-operating-cost savings by the end of 2008. To achieve those savings, the company said it will have to incur roughly $180 million in one-time expenditures.