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PanAmSat comes back to earth after profit warning

Shares of satellite operator PanAmSat Corp. (Nasdaq: SPOT) plunged 3 15/16, or 12 percent, to 30 5/16 Tuesday after warning that its 1999 sales and earnings would fall short of analysts' estimates.

Late Monday, the Greenwich, Conn. company said delays in the launch of its Galaxy XI satellite would result in "significantly" lower sales and earnings this year.

Company officials now expect sales to be roughly equal to $737 million it recorded in 1998 and earnings would fall below the $124.6 million it pocketed last year.

"PanAmSat remains fully committed to its satellite expansion and restoration plans and its resolve to build and operate the world's largest geostationary satellite system," said CEO Douglas Kahn in a prepared release. "While it will take us a few months longer to do so, the long-term outlook for our business remains very strong."

First Call consensus pegged PanAmSat for a profit of $1.17 a share this year, up from the 83 cents a share it earned in 1998.

PanAmSat shares peaked at 58 3/16 in June before falling to a low of 26 3/8 in April.

The Galaxy XI satellite, which was originally set to be launched sometime in the third quarter, is now set for the fourth quarter of 1999, to go into service in the first quarter of 2000. Five additional satellites are set to be launched and fully effective in 2000 and 2001.

Last year PanAmSat's earnings were eroded after satellite problems disrupted service to millions of paging customers across the U.S. in May, causing a two percent drop in video services revenue in the second quarter.

The company said based on its revised launch schedule, it expects revenue growth of 30 to 40 percent in 2000 over 1999 expectations.

In April, PanAmSat posted lower-than-expected sales and earnings in its first quarter, pocketing $30.4 million, or 20 cents a share, on sales of $193.5 million. The results were basically flat with the year-ago period, when it earned $35.3 million, or 24 cents a share, on sales of $193 million.

Ten of the 11 analysts following the stock rate it either a "buy" or "strong buy."

Reuters contributed to this report.>