Communications Satellite Corp. officials cautioned stockholders yesterday that their new push to diversify may crimp profits over the next few years, but they predicted a "substantial" increase in earnings over the medium and long term.
At an annual meeting here, corporate officers warned of heavy new start-up costs in efforts to move the company beyond its basic satellite business into home television, environmental services and other new areas.
Chairman John D. Harper served notice that the diversification effort would be expensive and conceded Comsat will -- for the first time in its history -- have to take on substantial long-term debt.
However, Harper asserted, once these new subsidiaries are operating, the diversification effort will yield "substantial earnings over the medium and long term," possibly in 1983 and later.
Harper's long-term prognosis were accepted without serious dissent by the 120 or so shareholders who attended the session. Details were spelled out by Comsat President and Chief Executive Officer Joseph V. Charvk.
Largely because of investments connected with the diversification program, the company's profits dipped 5 percent in 1980 to $38.3 million ($4.79 a share).
First-quarter profits this year were up sharply over the same period for 1980, but the figure was bloated by a change in accounting procedures. Excluding this, earnings levels fell by $1.5 million (20 cents).
Comsat's diversification will take it beyond its original congressional charter to provide communications satellite services and into competition with major private communications firms in a wide range of businesses.
As part of that expansion, the corporation has been split into two basic entities -- one to deal solely with providing the satellite services mandated by Congress and a series of new subsidiaries to enter "nonregulated" businesses.
The shift is partly a ploy to free the new subsidiaries from regulation by the Federal Communications Commission. Company officials made little effort yesterday to hide their displeasure over the past differences with the FCC.
In reviewing the company's short-term outlook, Charyk told stockholders the biggest profit-damper so far has come from start-up costs for its new business satellite system, which lost $12.4 million in 1980 -- with more losses likely in 1981.
Charyk warned that, as equipment needs expand, costs "will be substantial and will have an additional nearterm negative effect on our earnings." However, he predicted the program would turn a profit in 1983 and grow rapidly later on.
He also predicted long-term returns for the company's new satellite home television subscription service, expected to begin an initial three-channel service on the East Coast within three to four years after FCC approval.