Hughes Strikes Gold In Outer Space

Suddenly, Mike Armstrong is cruising Hollywood's fast lane. On Jan. 23, a day after snagging $137.5 million from AT&T for a 2.5% stake in his DirecTV unit, the Hughes Electronics CEO fielded congratulatory calls from Viacom CEO Sumner Redstone and other media honchos.

The deal brings AT&T's clout to a satellite-to-home broadcasting service already thriving: 1.3 million households pay about $30 a month for DirecTV's 175 channels. Within months, AT&T will market DirecTV to its long-distance phone customers. It also plans to sell Hughes's DirecPC, transmitting Internet multimedia data to home computers. "By the end of the year, we will have a whole complement of services in the market," says Armstrong.

Big talk? Armstrong has delivered before. After turning around IBM's European unit, he took over Hughes in 1992. He transformed the stagnant defense contractor, boosting margins and launching promising ventures--DirecTV among them. The result: Hughes shares have climbed to $53 from $15 since his arrival.

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