Bermuda-based Globalstar posted a net loss of $219 million, or $1 per share, wider when compared with a loss of $48.1 million, or 20 cents a share, for the same period a year ago.
Financial analysts expected the company to lose 90 cents per share, according to First Call/Thomson Financial.
Quarterly revenue increased to $1.2 million, up from no revenue for the same period last year.
Stock in the company plummeted, falling at one point in early trading as much as 67 percent to $2, a new 52-week low. By market close, Globalstar shares had fallen more than 60 percent to $2.38.
Globalstar announced that its subscriber totals reached 21,300, more than double the number at the end of the previous quarter. But the company described its rate of subscriber and usage growth as "unacceptably slow," and executives said Globalstar will begin a more intense marketing effort.
The company said it will try to sell its phones and service directly to large businesses and government agencies.
Satellite phone service offers coverage around the globe, but it is costly and the phones are bulky and have fewer features than most new digital cellular phones.
The slow growth again raises concerns that Globalstar could face a similar fate as Iridium, the world's first satellite phone company, which went bankrupt and ended in failure. On Monday, a group led by former Pan American World Airways executive Dan Colussy offered Iridium $25 million for its assets.
Investment bank Merrill Lynch on Monday reduced its rating on Globalstar shares to the rare "sell" rating, down from a "neutral" recommendation. In a research note, the bank described Globalstar's subscriber and minutes of usage growth as "lackluster."
"We believe that it has become increasingly difficult for Globalstar to service its debt interest costs over the long term as a result of its poor marketing programs," Merrill Lynch said. "Without the financial backing of Loral, we believe that Globalstar's liquidity issues could worsen in 2001."
Loral Space & Communications, a satellite manufacturer, owns a major stake in Globalstar--about 40 percent. Wireless technology giant Qualcomm also owns a stake in the company. But many analysts and investors are concerned that the companies, like Motorola did with Iridium, may grow tired of funding a venture facing tepid demand.
Globalstar executives Monday said the company will meet its next interest payment due date and does not plan to restructure its debt, according to Reuters.
Reuters and Bloomberg contributed to this report.