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Dividend increases though earnings drop for Comsat

THE BALTIMORE SUN

Comsat Corp., the Bethesda-based satellite communications and entertainment company, said yesterday that it has increased its quarterly dividend by 5 percent despite a 6.5 percent drop in earnings compared with the same period a year ago.

Comsat reported that its second-quarter earnings dipped to $21.6 million, or 46 cents a share, from $23.1 million, or 49 cents a share, a year ago. However, the company said this year's quarterly earnings reflect costs of $4.1 million, or 8 cents a share, connected with its recent merger with Radiation Systems Inc.

The company raised its quarterly dividend to 19.5 cents a share from 18.5 cents.

Comsat's management accentuated the positive aspects of the report while acknowledging that it might not be able to achieve the double-digit earnings growth it had hoped for this year.

The company said an eightfold growth in earnings in its entertainment business had been offset by a 17 percent drop in its mobile communications segment. The entertainment business includes On Command Video, which pipes pay-per-view movies into hotel rooms, and the Denver Nuggets of the National Basketball Association.

Comsat Corp. ...... Ticker .... Yesterday's

..... ...... ...... Symbol .... Cls. ... Chg.

...... ...... CQ ........ 24 3/4 . + 1/4

Period ended

June 30 ......... 2nd qtr. .... Year ago ... Chg.

Revenue ........ $207,900 ..... $185,800 ... +11.9%

Net Income ...... $21,600* ..... $23,100 ... 6.5%

Primary EPS ....... $0.46* ....... $0.49 ... 6.1%

.......... ....... 6 mos. ...... Year ago ... Chg.

Revenue ........ $408,400 ...... $380,500 ... +7.3%

Net Income ...... $41,800 ....... $45,500 ... 8.1%

Primary EPS ....... $0.89 ......... $0.97 ... 8.2%

* Includes costs of $4.1 million, or 8 cents a share, related to merger with Radiation Systems Inc.

=1 Figures in thousands (except per share data.)

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