BigBand’s stock slides on lower Q3 outlook
BigBand Networks saw its shares drop more than 20 percent once the market closed yesterday after the company lowered its third-quarter outlook during its second-quarter earnings call.
During the earnings report, the vendor of digital video gear said that, excluding some items, it expected a loss of between 13 cents and 15 cents per share in the third quarter, while analysts had estimated the company would earn 6 cents, according to a survey by Bloomberg. BigBand was trading at $4.52 per share just before noon today, which was down from its previous close of $5.60.
“Our reported results were mostly in line with the outlook we provided on our last earnings call; however, slower order rates in our second quarter are expected to impact revenue into the second half of 2009, and this is reflected in our lower outlook for the third quarter,” said Amir Bassan-Eskenazi, president and CEO of BigBand Networks. “As we enter the third quarter, our bookings visibility is improving. In addition, we are winning new systems and establishing new product applications that we believe will improve our position as industry spending normalizes. As a result, we are optimistic about our long-term opportunity in the digital video networking market.”
BigBand’s second-quarter revenue was $39 million, which was 9 percent less than the $43 million it posted in the same quarter a year ago.
On a non-GAAP basis, the company reported net income of $6 million, or 9 cents per diluted share, in the second quarter of 2009, compared with net income of $4.5 million, or 7 cents per diluted share, reported in the second quarter of 2008.
Second-quarter 2009 non-GAAP results exclude, among other things, $3.5 million in stock-based compensation expense and $500,000 related to class-action litigation charges, offset in part by $1 million in income taxes on higher non-GAAP earnings.
As of the end of the June quarter, cash, cash equivalents and marketable securities increased to $173.3 million from $167.5 million as of the end of the prior quarter.
BigBand counts Cox Communications, Time Warner Cable, Charter Communications and Bright House Networks among its customers for its switched digital video (SDV) offering. Verizon is also a customer of BigBand’s product offerings.
In June, the Federal Communications Commission dropped fines that were levied at Time Warner Cable and Cox over their use of SDV, which should lead to more SDV deployments by cable operators going forward.
BigBand’s fortunes could also get a boost down the road from its Converged Video Exchange (CVEx) control plane platform that was introduced last month.
BigBand Networks has a slate of demonstrations scheduled for next week’s CableLabs Summer Conference in Keystone, Colo.
BigBand’s demonstrations will include:
- Efficient delivery of IPTV and Web video to multiple screens and devices, leveraging existing network infrastructure with BigBand’s CVEx and vIP PASS. The demonstration highlights reliable and scalable delivery of both traditional variable bit rate video to a legacy set-top box and a YouTube vIP PASS Web session to a PC – all in the same QAM channel. BigBand’s new CVEx platform is an intelligent control plane that provides a unified means to deliver and manage video services across networks and devices.
- Network-based personalized TV, giving service providers the ability to offer each subscriber a dedicated stream, whether watching linear programming, viewing non-linear content or repurposing content from the Internet.
- Next-generation edge QAM platform that meets service providers’ needs for highly reliable, fully redundant and efficient delivery of multiple services, including SDV, VOD, addressable advertising, IP video and time-shifted TV.
The CableLabs Summer Conference 2009, which starts Monday and runs through Wednesday, will be held in the Keystone Resort and Conference Center.