Communications Satellite Corp., citing impact from promotional discounts, continuing losses in its video division and the launching of new satellites, reported yesterday that net income fell 37 percent to $12.3 million (65 cents per share) to $7.8 million (96 cents) in the third quarter, ended Sept. 30.
Revenue at the Washington-based company was up 1.4 percent to $112.4 million, from $110.9 million for the quarter.
Operating income in Comsat's core business of channeling international communications fell 8 percent during the quarter to $27.2 million from $29.6 million in that period of 1989.
The company attributed the decline to promotional discounts for international service that it has offered since July and to higher depreciation resulting from launches of three new satellites by the Intelsat consortium, of which Comsat is a part owner.
The discounts were also intended to keep Comsat within its federally authorized rate of return, said George Dellinger, vice president in the Washington office of the County-NatWest securities firm. Analysts had expected the discounts to bring down earnings.
But the size of the losses in Comsat's video entertainment division, which channels movies and other entertainment to hotel rooms, was a surprise to some analysts. The division reported an operating loss of $6.5 million for the quarter, almost double the $3.7 million loss in the 1989 period. "Video just continues to disappoint," said Dellinger.
Comsat attributed these losses to lower-than-expected revenue, promotional incentives offered to hotels and the purchase of the Denver Nuggets basketball team.
Comsat stock dropped $1.50 yesterday to $25.37 1/2.
Dominion Resources, parent company of Virginia Power, earned $160 million ($1.57 a share) in the third quarter ended Sept. 30, up 9.8 percent from $145.7 million ($1.46) in the same quarter last year.
The Richmond company said its earnings so far this year are up mostly because of higher rates, in effect subject to regulatory approval, and because costs have dropped.
Revenue for the period was $997.6 million, up 1.4 percent from $983.5 million.
Earnings at Virginia Power, Dominion's largest subsidiary, were up 5 percent for the quarter to $1.46 per share.
Legent Corp., a Vienna software company, yesterday reported that it earned $32.9 million ($1.52 a share) in the year ended Sept. 30, up 32.4 percent from $24.8 million ($1.15) the previous year.
Sales for the year were up 25.5 percent to $169.5 million from $135.1 million. In the quarter ended Sept. 30, the company earned $8.9 million (42 cents), up 18.1 percent from $7.5 million in the year-earlier quarter. Sales were $46.6 million, up 32.9 percent from $35 million.
Legent said the increase in earnings in the most recent quarter did not keep pace with sales largely because it expanded its sales force by more than 20 percent.
Legent, which sells software for computer networks managed by IBM mainframes, was born of a series of mergers. In early 1989, Morino Inc. merged with Duqesne Systems Inc. of Pittsburgh to form Legent. In November, Legent bought Business Software Technology.