SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON D.C. 20549

                                    FORM 10-Q


            QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

                  For the quarterly period ended March 31, 1998


                           Commission File No. 0-22531

                              PanAmSat Corporation
             (Exact Name of Registrant as Specified in its Charter)

                 Delaware                       95-4607698
     (State or other Jurisdiction of        (I.R.S.  Employer
      Incorporation or Organization)        Identification No.)

                    One Pickwick Plaza, Greenwich, CT 06830
                    (Address of Principal Executive Offices)

        Registrant's telephone number, including area code: 203-622-6664


Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  Registrant  was
required  to file  such  reports)  and  (2)  has  been  subject  to such  filing
requirements for the past 90 days.

                                    YES X           NO

As of March 31, 1998, an aggregate of 149,150,246 shares of the Company's Common
Stock were outstanding.




<PAGE>



Cautionary Statement For Purposes Of The "Safe Harbor" Provisions Of The Private
Securities Litigation Reform Act of 1995


This  Quarterly  Report  contains  historical  information  and  forward-looking
statements.  The Private  Securities  Litigation  Reform Act of 1995  provides a
"safe  harbor" for certain  forward-looking  statements.  When used in this Form
10-Q  the  words  "estimate,"  "project,"   "anticipate,"   "expect,"  "intend,"
"believe" and other similar expressions are intended to identify forward-looking
statements  and  information.  The Company  identifies  the following  important
factors which could cause the Company's actual results to differ materially from
any results which might be projected,  forecasted,  estimated or budgeted by the
Company in  forward-looking  information:  (i) risks associated with technology,
(ii)  regulatory  risks,  (iii)  effect  of  loss  of key  personnel,  and  (iv)
litigation.  Such factors are more fully  described  under the caption  "Item 7.
Management's  Discussion  and  Analysis of  Financial  Condition  and Results of
Operations - Risk Factors" in the  Company's  Annual Report on Form 10-K for the
fiscal year ended December 31, 1997.  Reference is also made to such other risks
and uncertainties detailed from time to time in the Company's other filings with
the Securities and Exchange Commission.  The Company cautions that the foregoing
list of important factors is not exclusive. Furthermore, the Company operates in
an industry sector where securities values may be volatile and may be influenced
by economic and other factors beyond the Company's control.



<PAGE>


                              PanAmSat Corporation
                          CONSOLIDATED BALANCE SHEETS
                                 (in thousands)

<TABLE>
<CAPTION>

                                                                       March 31,        December 31,
                                                                         1998               1997
                                                                     -----------        ------------
                                                                    (Unaudited)
<S>                                                                  <C>                 <C>
ASSETS

CURRENT ASSETS:
 Cash and cash equivalents                                           $    48,569         $    91,739
 Accounts receivable-net                                                  82,266              41,030
 Net investment in sales-type leases                                      27,767              27,757
 Prepaid expenses and other                                               83,705              77,891
 Deferred income taxes                                                    41,952              46,940
                                                                     -----------        ------------
Total current assets                                                     284,259             285,357

SATELLITES AND OTHER PROPERTY AND
 EQUIPMENT-Net                                                         2,671,985           2,506,082

NET INVESTMENT IN SALES-TYPE LEASES                                      302,429             324,689

GOODWILL-Net of amortization                                           2,482,258           2,498,498

DEFERRED CHARGES AND OTHER ASSETS                                         54,729              67,808
                                                                     -----------        ------------

TOTAL ASSETS                                                         $ 5,795,660         $ 5,682,434
                                                                     -----------        ------------

</TABLE>

                   The accompanying notes are an integral part
                   of these consolidated financial statements
<PAGE>


                              PanAmSat Corporation
                   CONSOLIDATED BALANCE SHEETS - (continued)
                       (in thousands, except share data)

<TABLE>
<CAPTION>

                                                                       March 31,        December 31,
                                                                         1998               1997
                                                                     -----------        ------------
                                                                    (Unaudited)
<S>                                                                  <C>                 <C>
LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:
 Current portion of long-term debt                                   $    16,259         $    16,398
 Accounts payable and accrued liabilities                                 25,316              26,828
 Deferred gains on sales-leasebacks                                       37,977              42,870
 Deferred revenues                                                        14,106              18,822
                                                                     -----------        ------------
TOTAL CURRENT LIABILITIES                                                 93,658             104,918

DUE TO AFFILIATES (PRINCIPALLY MERGER-RELATED
  INDEBTEDNESS)                                                        1,801,229           1,802,195

LONG-TERM DEBT                                                           786,660`            640,123

DEFERRED GAINS ON SALE-LEASEBACKS                                        161,186             191,882

DEFERRED INCOME TAXES                                                    203,798             179,267

OTHER LIABILITIES AND DEFERRED CREDITS                                    98,096             103,029

ACCRUED OPERATING LEASEBACK
  EXPENSE                                                                 54,494             100,184

                                                                     -----------        ------------

TOTAL LIABILITIES                                                    $ 3,199,121         $ 3,121,598
                                                                     -----------        ------------

COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' EQUITY:
 Common Stock, $0.01 par value 400,000,000
  shares authorized, 149,150,246 shares issued
  and outstanding                                                          1,491               1,491
 Additional paid-in-capital                                            2,501,699           2,501,344
 Retained earnings                                                        93,349              58,001
                                                                     -----------        ------------
Total Stockholders' Equity                                             2,596,539           2,560,836
                                                                     -----------        ------------

 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                          $ 5,795,660         $ 5,682,434
                                                                     -----------        ------------

</TABLE>
                   The accompanying notes are an integral part
                   of these consolidated financial statements

<PAGE>


                              PanAmSat Corporation
                CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
               For the Three Months Ended March 31, 1998 and 1997
                        (in thousands, except share data)

<TABLE>
<CAPTION>

                                                                       March 31,          March 31,
                                                                         1998               1997
                                                                     -----------        ------------
<S>                                                                  <C>                 <C>

REVENUES:
  Operating leases, satellite services and other                     $   181,788         $    86,527
  Outright sales and sales type leases                                    11,237              41,026
                                                                     -----------        ------------
     Total revenues                                                      193,025             127,553
                                                                     -----------        ------------
OPERATING COSTS AND EXPENSES:
  Cost of outright sales and sales type leases                                 -              16,422
  Leaseback expense, net of deferred gain                                 13,762              15,417
  Depreciation and amortization                                           58,002              14,585
  Direct operating costs                                                  22,321               8,158
  Selling, general and administrative expenses                            14,064               5,460
                                                                     -----------        ------------
     Total operating costs and expenses                                  108,149              60,042
                                                                     -----------        ------------

INCOME FROM OPERATIONS                                                    84,876              67,511

INTEREST EXPENSE, NET                                                    (22,208)             (1,778)
OTHER INCOME                                                                   -               1,232
                                                                     -----------        ------------
INCOME BEFORE INCOME TAXES                                                62,668              66,965

INCOME TAXES                                                              27,320              25,112
                                                                     -----------        ------------
NET INCOME                                                           $    35,348         $    41,853
                                                                     -----------        ------------
NET INCOME PER COMMON SHARE - BASIC AND DILUTED                      $      0.24         $      -
                                                                     -----------        ------------
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING                           149,403,886                -
                                                                     -----------        ------------
</TABLE>
                   The accompanying notes are an integral part
                   of these consolidated financial statements

<PAGE>


                              PanAmSat Corporation
                CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
              For the Three Months Ended March 31, 1998 and 1997
                                 (in thousands)

<TABLE>
<CAPTION>

                                                                       March 31,          March 31,
                                                                         1998               1997
                                                                     -----------        ------------
<S>                                                                  <C>                 <C>

CASH FLOWS PROVIDED BY OPERATING ACTIVITIES:
Net income                                                            $   35,348         $    41,853
Adjustments to reconcile net income to
 net cash provided by operating activities:
 Cost of outright sales                                                     -                  4,838
 Gross profit on sales-type leases                                          -                (12,124)
 Depreciation and amortization                                            58,002              14,585
 Deferred income taxes                                                    29,519               7,510
 Amortization of gains on sale-leasebacks                                 (9,902)            (10,717)
 Provision for uncollectible receivables                                    -                 (4,534)
 Interest expense capitalized                                            (16,977)             (5,254)
 Changes in assets and liabilities:
  Collections on investments in sales-type leases                         22,250               5,536
  Operating lease and other receivables                                  (28,157)            (17,664)
  Prepaid expenses and other current assets                               (5,814)              4,771
  Accounts payable and accrued liabilities                                (2,139)             (1,037)
  Accrued operating leaseback expense                                    (26,810)            (35,173)
  Deferred gains and revenues                                             (9,021)               (619)
                                                                     -----------        ------------
    NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES                   46,299              (8,029)
                                                                     -----------        ------------

CASH FLOWS FROM INVESTING ACTIVITIES:
 Capital Expenditures                                                   (138,681)           (349,471)
 Early buyout of sale-leaseback                                          (96,574)                -
                                                                     -----------        ------------
    NET CASH USED IN INVESTING ACTIVITIES                               (235,255)           (349,471)
                                                                     -----------        ------------

CASH FLOWS FROM FINANCING ACTIVITIES:
 New borrowings                                                          875,000                -
 Net contributions from parent company                                      -                357,503
 Repayments of long-term debt                                           (729,568)               -
 Stock issued to 401(k) plan                                                 354                -
                                                                     -----------        ------------
  NET CASH PROVIDED BY FINANCING ACTIVITIES                              145,786             357,503
                                                                     -----------        ------------

NET (DECREASE)INCREASE IN CASH AND CASH EQUIVALENTS                      (43,170)                  3
CASH AND EQUIVALENTS, beginning of period                                 91,739                  29
                                                                     -----------        ------------
CASH AND EQUIVALENTS, end of period                                  $    48,569         $        32
                                                                     -----------        ------------

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
 Cash received for interest                                          $     3,893         $    -
                                                                     -----------        ------------
 Cash paid for interest                                              $    31,610         $    -
                                                                     -----------        ------------
 Cash paid for taxes                                                 $     1,719         $    -
                                                                     -----------        ------------

</TABLE>

                   The accompanying notes are an integral part
                   of these consolidated financial statements

<PAGE>


                              PanAmSat Corporation

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


       (1) General.

              These  unaudited   consolidated  financial  statements  have  been
              prepared  in  accordance   with  generally   accepted   accounting
              principles  for  interim   financial   information  and  with  the
              instructions to Rule 10-01 of Regulation S-X. Accordingly, they do
              not  include  all of the  information  and  footnotes  required by
              generally  accepted  accounting  principles for complete financial
              statements.  In the opinion of management,  all adjustments  which
              are of a normal  recurring  nature necessary to present fairly the
              financial position, results of operations and cash flows as of and
              for the  three-month  periods  ended  March 31, 1998 and 1997 have
              been made.  Operating results for the three months ended March 31,
              1998 and  1997 are not  necessarily  indicative  of the  operating
              results for the full year. For further  information,  refer to the
              financial  statements and footnotes thereto included in PanAmSat's
              Annual Report on Form 10-K for the fiscal year ended  December 31,
              1997.

       (2) Business Combination.

              The Company  commenced  operations on May 16, 1997 upon the merger
              of PanAmSat  International Systems, Inc. (then operating under its
              previous name, PanAmSat  Corporation  ("PanAmSat  International"))
              and   the   Galaxy   Satellite   Services   division   of   Hughes
              Communications,  Inc. (the "Galaxy Business") (the "Combination").
              Pursuant to the Combination,  the aggregate  consideration paid to
              PanAmSat  International  shareholders  consisted of  approximately
              $1.5  billion in cash and  approximately  42.5  million  shares of
              PanAmSat  Common Stock having an estimated  value of $1.3 billion.
              Concurrent  with the  Combination and as an integral part thereof,
              the Company sold its  direct-to-home  ("DTH") television rights in
              certain foreign markets to an affiliate for $225 million (the "DTH
              Options").

              The Company has applied the purchase  method of  accounting to the
              transaction with the Galaxy Business as the acquiror. The purchase
              price has been  allocated to the assets  acquired and  liabilities
              assumed based on estimates of their respective fair values. Assets
              acquired  totaled  $2.0  billion,  liabilities  assumed  were $3.2
              billion  (including $1.7 billion of merger debt) and shares valued
              at $1.3  billion were issued in the  transaction.  A total of $2.5
              billion,  representing  the excess of  acquisition  value over the
              fair value of PanAmSat  International's  net tangible assets,  has
              been allocated to intangible assets and is being amortized over 40
              years.

              The Company's consolidated results of operations have incorporated
              PanAmSat  International's  activity  commencing upon the effective
              date of the Combination. The unaudited pro forma information shown
              below for the three months ended March 31, 1997, presents combined
              results of  operations as if the  Combination  had occurred at the
              beginning of 1997  (excluding  the impact of the $225 million gain
              on the sale of the DTH Options as well as certain professional and
              advisory fees incurred in connection with the Combination totaling
              $31.6 million, both of which are non-recurring items that are not


<PAGE>


                              PanAmSat Corporation

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Continued)

              indicative of the  Company's  ordinary  course of  business).  The
              unaudited pro forma  information  shown below for the three months
              ended March 31, 1997 is not necessarily  indicative of the results
              of operations of the combined company had the Combination occurred
              at the  beginning  of 1997,  nor is the  information  shown  below
              necessarily indicative of future results.

                      (unaudited; in thousands, except per share data)

                                     Three Months Ended
                                          March 31,
                                       -------------
                                     1998            1997
                                                  (Pro forma)
                                     ----            ----
              Revenues            $ 193,025       $ 202,092
              Net income             35,348          24,075
              Net income per share
                -basic and diluted     0.24            0.16

       (3) New Accounting Pronouncements.

              In June 1997,  the  financial  Accounting  Standards  Board issued
              Statement of Financial  Accounting  Standards No. 130,  "Reporting
              Comprehensive Income", which requires a statement of comprehensive
              income to be included in the financial statements for fiscal years
              beginning  after December 15, 1997. The adoption of this statement
              in the  first  quarter  of 1998  resulted  in no  change  to total
              comprehensive income.

              In addition, in June 1997 the Financial Accounting Standards Board
              issued  Statement of Financial  Accounting  Standards No. 131 (FAS
              131),  "Disclosures  about  Segments of an Enterprise  and Related
              Information",  which  requires  disclosure of certain  information
              about  operating  segments and about  products and  services,  the
              geographic  areas in which a  company  operates  and  their  major
              customers. Any resulting change in disclosure will be reflected in
              the consolidated  financial statements for the year ended December
              31, 1998.

       (4) Galaxy VIII-i: Placed in Service.

              On December 8, 1997, the Company successfully  launched its Galaxy
              VIII-i Atlantic Ocean Region Satellite, the dedicated transmission
              platform  for the Galaxy  Latin  America  DTH  television  service
              called  DIRECTV.  The  3560-kilogram  satellite will transmit more
              then 200 digital  television  and music  channels for reception by
              Galaxy Latin America's  growing DTH subscriber base. Galaxy VIII-i
              is  co-located at 95 degrees west  longitude  with the Galaxy IIIR
              satellite  and  commenced  service on  February  24,  1998,  after
              successful completion of its in-orbit testing.

       (5) Financing Activities.

              On  January  16,  1998,  PanAmSat  completed  a private  placement
              pursuant  to Rule 144A under the  Securities  Act of 1933 for $750
              million  aggregate  principal  amount of new debt  securities (the
              "Offering"). The net proceeds from the Offering were used to repay
              bank loans  incurred to finance the tender  offer for certain debt
              securities  of  PanAmSat's  subsidiaries,  as well as for  general
              corporate purposes.
<PAGE>


                              PanAmSat Corporation

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Continued)

              In  connection  with the Offering,  the Company  executed a Credit
              Agreement  (the  "Credit  Agreement")  with  certain  lenders  and
              Citicorp USA, Inc. as  administrative  agent. The Credit Agreement
              amends and restates the credit  agreement  among the parties dated
              December 24, 1997 (the "Original Credit Agreement").  The Original
              Credit  Agreement  provided the Company with up to $500 million of
              revolving  credit loans (the  "Revolving  Credit  Loans")for  five
              years,  and up to $300  million in  short-term  loans  maturing on
              April 30, 1998 (the "Term Loans"). The Credit Agreement amends the
              Original Credit Agreement to terminate the Term Loan facility. The
              Company  currently  has $500  million of  Revolving  Credit  Loans
              available to it under the Credit Agreement.

              Also in  connection  with the Offering,  the Company  entered into
              certain U.S.  Treasury rate lock  contracts to reduce its exposure
              to fluctuations in interest rates. The aggregate  nominal value of
              these   contracts  was  $375  million  and  these  contracts  were
              accounted  for as hedges  because  they were applied to a specific
              refinancing  plan that was consummated  shortly after December 31,
              1997.  The cost to  unwind  these  instruments  during  the  first
              quarter of 1998 was approximately $9 million and will be amortized
              to expense over the term of the  newly-placed  debt  securities to
              which such hedges were applied.

       (6) Subsequent Event.

              Subsequent  to March  1998,  the Company  became  aware of certain
              anomalies and their  effects  relative to its Galaxy IV spacecraft
              which serves the domestic U. S.  marketplace.  These anomalies are
              expected to shorten substantially the useful life of the satellite
              and to affect services to some of the C-band transponder customers
              on the  satellite.  Management is evaluating  the effects of these
              anomalies  and is working with its  customers to develop  plans to
              meet their  requirements and to satisfy the Company's  obligations
              to  certain of the  customers.  The  Company  intends to procure a
              replacement  satellite  on an  accelerated  basis for a  scheduled
              in-service date before the Galaxy IV spacecraft reaches the end of
              its  expected  useful  life.  As with its  other  satellites,  the
              Company has  insurance  coverage  on the  affected  satellite  and
              intends to file a claim with its  insurance  carriers  in the near
              future. Based on the information  currently available,  management
              has evaluated the potential  financial  statement  impact of these
              anomalies in accordance  with its stated  accounting  policies and
              does not  believe  that a  material  loss will  result  from these
              anomalies because remaining revenues to be earned on the satellite
              together  with the  expected  insurance  recovery  will enable the
              Company to recover its  investment  in the satellite and any other
              costs it may incur.
<PAGE>


                              PanAmSat Corporation

                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS


         Results  of  Operations.  The  Company's  results  of  operations  have
incorporated PanAmSat  International's  activity commencing on May 16, 1997, the
effective date of the Combination. Since the results of operations for the three
months   ended  March  31,  1997  would   include  no  activity   for   PanAmSat
International, management has determined that for comparative purposes, it would
be more meaningful to present the information shown below on a "pro forma" basis
reflecting  the  Combination  as though it had occurred at the beginning of 1997
(excluding the impact of the $225 million gain on the sale of the DTH Options as
well as certain  professional  and advisory fees incurred in connection with the
Combination  totaling $31.6 million,  both of which are non-recurring items that
are not indicative of the Company's  ordinary course of business.) The pro forma
results for the three months ended March 31, 1997 are not necessarily indicative
of the combined  results that would have occurred had the  Combination  actually
occurred at the beginning of fiscal 1997.

<TABLE>
<CAPTION>

                                                               (unaudited; in thousands,
                                                                  except per share data)

                                                                  Three Months Ended
                                                                       March 31,

                                                               ----------------------------

                                                                 1998             1997
                                                                               (Pro forma)
                                                                 ----             ----
<S>                                                             <C>              <C>

Revenues
  Operating leases, satellite services and other                $  181,788       $  161,066
  Outright sales and sales type leases                              11,237           41,026
                                                                ----------       ----------
Total Revenues                                                     193,025          202,092
                                                                ----------       ----------

Costs and Expenses
  Cost of outright sales and sales
   type leases                                                        -              16,422
  Leaseback expense, net of deferred
   gain                                                             13,762           15,417
  Direct operating and SG&A costs                                   36,385           32,539
  Depreciation and amortization                                     58,002           46,313
                                                                ----------       ----------
Total                                                              108,149          110,691
                                                                ----------       ----------

Income from operations                                              84,876           91,401


Interest expense, net                                               22,208           30,993
Other income                                                          -              (1,232)
                                                                ----------       ----------
Income before income taxes and
  minority interest                                                 62,668           61,640

Income tax expense                                                  27,320           29,673
Minority interest                                                     -               7,892
                                                                ----------       ----------

Net income                                                         $35,348      $   24,075
                                                                ----------       ----------
Net income per share - basic and diluted                           $  0.24         $  0.16


</TABLE>

<PAGE>


                              PanAmSat Corporation

                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS

         Revenues. Revenues decreased $9.1 million, or 4%, to $193.0 million for
the three months ended March 31, 1998 from $202.1 million for the same pro forma
period in 1997. Video services revenues were $143.1 million for the three months
ended March 31,  1998, a decrease of 16% from the same pro forma period in 1997.
The decrease was primarily due to less sales and  sales-type  lease  activity as
compared to the first quarter of 1997. Telecommunications services revenues were
$37.5 million for the three months ended March 31, 1998, an increase of 17% from
the same pro forma period in 1997.  The increase was due  primarily to the start
of several  new  carrier  and  Internet-related  service  agreements  during the
quarter.

         The  revenue  results  can  also  be  analyzed  based  on the  type  of
agreement.  Revenues from sales and sales-type leases decreased to $11.2 million
for the three  months  ended March 31, 1998 from $41.0  million for the same pro
forma  period in 1997.  The decrease is  attributable  to a lower volume in 1998
relative  to 1997  of  outright  sales  and  sales-type  leases.  Revenues  from
operating leases of transponders,  satellite  services and other increased $20.7
million,  or 13%, to $181.8  million for the three  months  ended March 31, 1998
from  $161.1  million  for the same pro forma  period in 1997 due  primarily  to
increased service agreements  associated with available transponder capacity and
the provision of short-term, special events services.

         Cost of  Outright  Sales and  Sales-Type  Leases of  Transponders.  The
Company recorded no cost of outright sales and sales-type leases of transponders
for the three months ended March 31, 1998,  as compared to $16.4 million for the
same pro  forma  period  in 1997.  The pro  forma  cost of  outright  sales  and
sales-type  leases of transponders for the three months ended March 31, 1997 are
related to several  outright sales and sales-type  leases  executed  during that
period.

         Leaseback  Expense,  Net of Deferred Gain.  Leaseback  expense,  net of
deferred gain,  decreased  $1.6 million,  or 10%, to $13.8 million for the three
months ended March 31, 1998 from $15.4  million for the same pro forma period in
1997. The decrease is primarily  attributable  to the exercise by the Company of
an early buy out opportunity on one of its  sale-leaseback  arrangements  during
the first quarter of 1998.

         Direct Operating and Selling,  General and Administrative Costs. Direct
operating and selling,  general and administrative costs increased $3.9 million,
or 12%, to $36.4  million for the three  months  ended March 31, 1998 from $32.5
million for the same pro forma period in 1997.  The increase is due primarily to
additional costs associated with satellites  launched since the first quarter of
1997.
<PAGE>


                              PanAmSat Corporation

                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS

         Depreciation and Amortization.  Depreciation and amortization increased
$11.7  million,  or 25%, to $58.0  million for the three  months ended March 31,
1998 from $46.3 million for the same pro forma period in 1997,  due primarily to
depreciation expense associated with additional satellites placed in service.

         Income from Operations.  Income from operations decreased $6.5 million,
or 7%, to $84.9  million  for the three  months  ended March 31, 1998 from $91.4
million for the same pro forma period in 1997,  due primarily to the decrease in
total revenues.

         Interest Expense, Net. Interest expense, net decreased $8.8 million, or
$28%,  to $22.2  million  for the three  months  ended March 31, 1998 from $31.0
million for the same pro forma period in 1997. The decrease was due primarily to
the reduction in the company's  overall blended interest rate as a result of the
debt tender  offer and  restructuring  program for certain  debt  securities  of
PanAmSat's subsidiaries which commenced in November 1997.

         Income Tax Expense.  Income tax expense decreased $2.4 million,  or 8%,
to $27.3  million for the three months  ended March 31, 1998 from $29.7  million
for the same pro forma period in 1997. The decrease was due to a lower effective
tax rate in 1998  principally  as a  result  of  utilization  of  foreign  sales
corporation tax credits.

         Minority  Interest.  Minority  interest,  representing  perferred stock
dividends  of PanAmSat  International,  were $0 for the three months ended March
31, 1998 as compared to $7.9 million for the same pro forma period in 1997.  The
decrease  was  due  to  the  conversion  of  PanAmSat  International's  12  1/4%
Mandatorily Exchangeable Senior Redeemable Preferred Stock due 2005 into 12 3/4%
Senior  Subordinated  Notes due 2005 (the "Exchange Notes") in the third quarter
of  1997  and  the  related   termination  of  dividend   payment   obligations.
Approximately 99% of the Exchange Notes were subsequently  retired in connection
with the tender offer and restructuring program described above.

         Galaxy IV  Satellite  Update.  Subsequent  to March  1998,  the Company
became aware of certain  anomalies and their  effects  relative to its Galaxy IV
spacecraft  which serves the domestic U. S.  marketplace.  These  anomalies  are
expected to shorten substantially the useful life of the satellite and to affect
services  to  some  of  the  C-band  transponder  customers  on  the  satellite.
Management is evaluating the effects of these  anomalies and is working with its
customers  to  develop  plans to meet  their  requirements  and to  satisfy  the
Company's  obligations  to  certain of the  customers.  The  Company  intends to
procure  a  replacement  satellite  on an  accelerated  basis  for  a  scheduled
in-service date before the Galaxy IV spacecraft  reaches the end of its expected
useful life. As with its other satellites, the Company has insurance coverage on
the affected  satellite and intends to file a claim with its insurance  carriers
in the near future. Based on the information currently available, management has
evaluated  the  potential  financial  statement  impact  of these  anomalies  in
accordance  with its stated  accounting  policies  and does not  believe  that a
material loss will result from these anomalies because remaining  revenues to be
earned on the  satellite  together  with the expected  insurance  recovery  will
enable the  Company to recover its  investment  in the  satellite  and any other
costs it may incur.

         Financial Condition.

         Pursuant to the Combination,  aggregate  consideration paid to PanAmSat
International  shareholders  consisted of approximately $1.5 billion in cash and
approximately  42.5 million shares of PanAmSat  Common Stock. In connection with
the  Combination,  the  Company  obtained  a term  loan in the  amount of $1.725
billion from Hughes Electronics Corporation, an affiliate of the company ("HE").
In addition to the $1.725  billion  loan, at March 31, 1998 the Company also had
long-term indebtedness of $862.9 million (comprised primarily of $750 million of
bonds  under  the  Offering  (as  defined   below)  and  $76.2  million  due  to
affiliates).

         The  significant  cash  outlays  for the  Company  will  continue to be
primarily  capital  expenditures  related  to the  construction  and  launch  of
satellites and debt service costs.  With the  commencement  of  construction  of
PAS-6B, the Company now has seven satellites under various stages of development
for which the Company  has  budgeted  capital  expenditures.  The  Company  will
require  approximately $900 million to complete the construction,  insurance and
launch of PAS-6B, PAS-7, PAS-8, Galaxy X, Galaxy XI, PAS-9, and PAS-1R, together
with related equipment. This amount is expected to be funded from cash flow from
operations,  vendor  financing  and  borrowings  under the credit  Agreement (as
defined below). In addition to funding the

<PAGE>


                              PanAmSat Corporation

                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS

construction and launch of new satellites,  the Company also expects to exercise
its remaining  early buy-out  options  under  certain  satellite  sale-leaseback
transactions  entered into in prior years which will require the Company to fund
outlays of approximately $152 million in 1998 (for which an early buy-out option
for $96.6 million relating to transponders on SBS-6 was exercised by the Company
in January 1998) and approximately $366 million in 1999. Such additional outlays
are expected to be funded from cash flow from  operations and  borrowings  under
the Credit Agreement.

         On January 16, 1998, PanAmSat completed a private placement pursuant to
Rule 144A under the Securities Act of 1933 for $750 million aggregate  principal
amount  of new debt  securities  (the  "Offering").  The net  proceeds  from the
Offering were used to repay bank loans  incurred to finance the tender offer for
certain  debt  securities  of  PanAmSat's  subsidiaries,  as well as for general
corporate purposes.

         In  connection  with  the  Offering,  the  Company  executed  a  Credit
Agreement (the "Credit  Agreement")  with certain lenders and Citicorp USA, Inc.
as  administrative  agent.  The Credit  Agreement amends and restates the credit
agreement  among the  parties  dated  December  24, 1997 (the  "Original  Credit
Agreement").  The Original Credit Agreement provided the Company with up to $500
million of revolving credit loans (the "Revolving Credit Loans") for five years,
and up to $300 million in short-term loans maturing on April 30, 1998 (the "Term
Loans").  The Credit Agreement amends the Original Credit Agreement to terminate
the Term Loan  facility.  The Company  currently  has $500  million of Revolving
Credit Loans available to it under the Credit Agreement.

         PanAmSat believes that the Credit Agreement,  vendor financing,  future
cash flow from operations  (assuming  satellites in development are successfully
launched and commence service on the schedule  currently  contemplated) and cash
on hand will be sufficient to fund PanAmSat's  operations,  anticipated exercise
of early buy-out options on certain  satellite  sale-leaseback  transactions and
its remaining  costs for the  construction  and launch of  satellites  currently
under  development  for the  next  twelve  months.  There  can be no  assurance,
however,  that PanAmSat's  assumptions  with respect to future  construction and
launch costs will be correct,  or that additional vendor  financing,  PanAmSat's
future cash flow from operations and borrowings  under the Credit Agreement will
be sufficient to cover any  shortfall in funding for future  launches  caused by
launch  failures,  cost overruns,  delays or other  unanticipated  expenses.  If
circumstances  were to require  PanAmSat to incur additional  indebtedness,  the
ability of PanAmSat to incur any such additional  indebtedness  would be subject
to the terms of PanAmSat's outstanding indebtedness.  The failure to obtain such
financing could have a material adverse effect on PanAmSat's  operations and its
ability to accomplish its business plan.
<PAGE>


                              PanAmSat Corporation

                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS

         Net cash provided by (used in) operating  activities increased to $46.3
million for the three  months  ended March 31, 1998 from $(8.0)  million for the
three  months  ended  March  31,  1997.  The  increase  in  1998  was  primarily
attributable  to larger  adjustments  related  to amounts  of  depreciation  and
amortization and deferred income taxes as a result of the Combination.

         Net cash used in investing  activities  decreased to $235.3 million for
the three months ended March 31, 1998,  from $349.5 million for the three months
ended March 31, 1997. The decrease in 1998 was primarily  attributable  to fewer
capital  expenditures for satellite systems under development as compared to the
same period in 1997.

         Net cash provided by financing  activities  decreased to $145.8 million
for the three  months  ended March 31,  1998 from  $357.5  million for the three
months  ended March 31,  1997.  The  decrease in 1998 was  primarily  due to new
borrowings in connection  with the Offering,  the proceeds of which were used to
repay bank loans  incurred to finance the recent  tender  offer for certain debt
securities of PanAmSat's subsidiaries and for general corporate purposes.


<PAGE>


                          PART II - OTHER INFORMATION


Item 6.  Exhibits and Reports on Form 8-K.

         (a)      Exhibits

Exhibit No.

3.2               Restated Bylaws of PanAmSat.

10.9.5            Side  Letter,  dated as of March 9,  1998,  to  Agreement  for
                  Launching into Geostationary  Transfer Orbit of the PanAmSat 6
                  Satellite by an Ariane Launch Vehicle,  No. 94.5.918,  between
                  PanAmSat  International  and  Arianespace  S.A.,  constituting
                  Exhibit 10.12 to Amendment  No. 4 to PanAmSat  International's
                  Registration Statement on Form S-1 (Reg. No. 33-84836),  dated
                  March 29, 1995. (1)

10.15.5           Amendment No. 3, dated as of January 8, 1998, to Agreement for
                  Launching into Geostationary  Orbit of PanAmSat  Satellites by
                  an Ariane  Launch  Vehicle,  No.  95.5.933,  between  PanAmSat
                  International Systems, Inc. and Arianespace S.A., constituting
                  Exhibit 10.12.3 to PanAmSat  International's  Quarterly Report
                  on Form 10-Q for the period ended March 31, 1996. (1)

10.15.6           Amendment  No. 1, dated as of January 8, 1998,  to Side Letter
                  to Agreement for Launching into  Geostationary  Transfer Orbit
                  of  PanAmSat  Satellites  by an  Ariane  Launch  Vehicle,  No.
                  95.5.933, between PanAmSat International and Arianespace S.A.,
                  constituting  Exhibit  10.12.4  to  PanAmSat   International's
                  Quarterly  Report on Form 10-Q for the period  ended March 31,
                  1996. (1)

10.15.7           Amendment  No. 4, dated as of March 9, 1998,  to Agreement for
                  Launching  into  Geostationary   Transfer  Orbit  of  PanAmSat
                  Satellites by an Ariane Launch Vehicle, No. 95.5.933,  between
                  PanAmSat and Arianespace S.A., constituting Exhibit 10.12.3 to
                  PanAmSat International's Quarterly Report on Form 10-Q for the
                  period ended March 31, 1996. (1)

10.15.8           Side Letter No. 2, dated as of March 9, 1998, to Agreement for
                  Launching  into  Geostationary   Transfer  Orbit  of  PanAmSat
                  Satellites by an Ariane Launch Vehicle, No. 95.5.933,  between
                  PanAmSat  International  and  Arianespace  S.A.,  constituting
                  Exhibit 10.12.3 to PanAmSat  International's  Quarterly Report
                  on Form 10-Q for the period ended March 31, 1996. (1)

10.18.3           Amendment,  dated as of March 5,  1998,  to  Letter  Agreement
                  between the News  Corporation  Limited,  Globo  Comunicacoes e
                  Participacoes,   S.A.,  Grupo  Televisa,   S.A.  and  PanAmSat
                  International,   constituting   Exhibit  10.17.1  to  PanAmSat
                  International's Quarterly Report on Form 10-Q/A for the period
                  ended March 31, 1996. (1)


<PAGE>


10.25.1           Amendment, dated as of March 5, 1998, to Full-Time Transponder
                  Service  Agreement From PAS-3 (European Beam) between PanAmSat
                  International and Televisa S.A., constituting Exhibit 10.16 to
                  PanAmSat International's Quarterly Report on Form 10-Q for the
                  period ended September 30, 1996. (1)

10.27.2           Second  Amended and  Restated  Transponder  Purchase  and Sale
                  Agreement,  dated  as  of  March  5,  1998,  between  PanAmSat
                  International and NetSat Servicos Ltda. (1)

10.41.2           Schedule identifying substantially identical agreements to the
                  Indemnity Agreement  constituting  Exhibit 10.41 to PanAmSat's
                  Quarterly  Report on Form 10-Q for the  period  ended June 30,
                  1997 in favor of  Charles  H.  Noski,  Frederick  A.  Landman,
                  Patrick J. Costello,  Steven D. Dorfman,  John J. Higgins, Ted
                  G. Westerman,  Dennis F. Hightower,  James M. Hoak,  Joseph R.
                  Wright,  Jr.,  Michael T. Smith,  Lourdes  Saralegui,  Carl A.
                  Brown,  Kenneth  N.  Heintz,  Robert  A.  Bednarek,  James  W.
                  Cuminale, David P. Berman and Roxanne S. Austin.

10.45.1           Amendment, dated as of March 6, 1998, to the Agreement between
                  PanAmSat International and Frederick A. Landman,  constituting
                  Exhibit 10.11.16 of PanAmSat International's  Quarterly Report
                  on Form 10-Q for the period ended June 30, 1996.

10.51             Fixed Price  Contract for PAS 6B HS601HP  Spacecraft,  Related
                  Services and Documentation--Contract No. 98-PAS-001,  dated as
                  of March 9, 1998,  between PanAmSat  International  and Hughes
                  Space and Communications Company. (1)

10.52             Transponder  Service  Agreement,  dated as of  March 5,  1998,
                  between PanAmSat International and Sky Multi-Country Partners.
                  (1)


27                Financial Data Schedule

--------
(1) Portions of this Exhibit have been omitted pursuant to a request for
confidential treatment filed with the Securities and Exchange Commission.


         (b)      Reports on Form 8-K.

                  Registrant  filed a Current  Report on Form 8-K, dated January
                  16,  1998,  in respect of  Registrant's  press  release  dated
                  January 16, 1998 announcing the consummation of an offering of
                  certain debt securities of the Registrant (Items 5 and 7(c)).

                  Registrant  filed a Current Report on Form 8-K/A,  dated March
                  25, 1998,  in respect of pro forma  financial  information  in
                  connection with the merger of PanAmSat  International  and the
                  Galaxy Services division of Hughes Communications, Inc. (Items
                  7(b) and (c)).


<PAGE>


                                    SIGNATURE


Pursuant to the  requirements  of the  Securities  and Exchange Act of 1934, the
Registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned thereunto duly authorized.

                                                   PanAmSat Corporation



Date:  May 15, 1998                                /s/ Kenneth N. Heintz
                                                   ----------------------------
                                                   Kenneth N. Heintz
                                                   Executive Vice President and
                                                   Chief Financial Officer
                                                   and a Duly Authorized
                                                   Officer of the Company