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Technology Stocks : Loral Space & Communications

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To: Mohan Marette who wrote (2231)	3/13/1998 1:49:00 PM
From: Valueman	Read Replies (4) of 10852

I think there is surprise everywhere you look Mohan. Those numbers I gave previously were from Loral, and the assumptions behind them are so conservative that they appear almost goofy now. Readware has cited the fact that transponder pricing appears to be firming even more than expected. Couple that with greater utilization and the numbers grow. Remember, in the case of Skynet/SatMex/Orion(pertially), the sat costs $250 million to put in orbit, and it is depreciated over 10 years. Operating costs are about $10 million per year, more than half of that insurance. An average of 52 transponders will generate about $90 million per year using ultraconservative revenue numbers. Loral believes they can double, and in some cases triple these numbers. Almost every penny above these numbers drops straight to the bottom line. It is truly a phenomenal business plan. This year may end up ositive, but it all depends on what they use for costs on C* and G*, and what they do with the massive tax-loss carryforward they will inherit with Orion. It is not important though. Their constellations will add GEOs only towards the end of 98(Telstar 6 & 7, Morelos III, Orion 3, L-Star 1&2??) with most in service in 99.

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