Loral Cuts Outlook for Sales, Profit

Loral Space & Communications Ltd. on Tuesday slashed revenue and earnings expectations because of the drought in telecommunications spending, and its shares plunged by nearly 33%.

The New York-based company, which sells satellites and satellite communications services, said it would not be able to achieve profitability in late 2003 as previously forecast, but dismissed analysts’ concerns it was headed for bankruptcy or delisting.

“We’re not concerned about bankruptcy.... We’re not aware of concerns about delisting,” Loral Chief Executive Bernard Schwartz told analysts on a conference call.

Although the company’s share price has plunged below the $1 minimum trading requirement on the New York Stock Exchange, Schwartz said the NYSE also looks at operating and financial issues, which he said aren’t problems.

Loral shares fell 32 cents to close at 66 cents on the NYSE. They are down 78% this year.

The company, which has been hit hard by a slump in telecommunications and a downturn in satellite demand, did not indicate how soon it foresees profitability.

Loral said it still expected to end the year with $80 million to $90 million in cash and available credit after capital spending of $160 million.

The company said it now expects a full-year loss of $190 million, or 50 cents a share including certain charges, compared with its previous forecast of a loss of 40 cents to 50 cents.

Loral blamed much of the shortfall on its Skynet satellite services business, which it said has been hurt by the economic slowdown and delay in demand for high-speed data services.

CFTC Approves Rules

for Single-Stock Futures

The Commodity Futures Trading Commission on Tuesday approved long-delayed customer margin rules governing single-stock futures, clearing one of the final obstacles to trading of the products.

The Securities and Exchange Commission, which also must approve the rules before trading can begin, will act as quickly as possible, SEC Chairman Harvey L. Pitt said.

Single-stock futures will provide “a new opportunity for customers to manage their financial risk,” CFTC Chairman James Newsome said after the vote. Commissioners set the margin, or initial deposit, requirement at 20% for the contracts.

Futures exchanges, which have lost business to overseas and electronic markets, see single-stock futures as a new product to retain or attract customers and tap into the U.S. equity market.

The contracts will allow investors to make leveraged bets on price movements of individual stocks. The first futures are likely to be offered on major blue-chip shares.

Single-stock futures will require an investor to buy or sell a company’s stock, or settle in cash, at a specific price and date. They differ from stock options, which give investors the right to buy or sell a security without requiring them to do so.

U.S. exchanges could start trading single-stock futures “by the end of August or early September,” Newsome said.

Banks, pension-plan and hedge-fund managers and individual investors are among potential users.

Estimates of demand vary. “I ask various people, and demand ranges from ‘zero’ to ‘I can’t wait,’ ” said John G. Gaine, president of the Managed Funds Assn.

Bloomberg News, Reuters

SEC Proposes Anti-Terrorism Rules

The Securities and Exchange Commission on Tuesday proposed anti-terrorism rules that would require brokerages and mutual funds to verify the identities of people who try to open accounts.

The rules also would require the firms to maintain records of the information used to verify the person’s identity and check the information against any government lists of known or suspected terrorists or terrorist groups, the SEC said. Other government regulators will enforce similar rules over banks and commodities firms.

The rules will apply only to new accounts, not existing accounts.

Bloomberg News