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Int’l sales help Harmonic stay the course in Q3

Thu, 10/29/2009 - 8:35am
Brian Santo

Harmonic’s third-quarter sales were up a bit from the second quarter, due in part to growing strength in international markets – thanks in part to the acquisition of Scopus – and also to greater penetration in the satellite and telco markets.

The company said the market is still tight, but it sees signs that customers might be preparing to start spending again.

For the third quarter of 2009, Harmonic reported net sales of $83.9 million, down from $91.5 million in the third quarter of 2008, but up a bit sequentially; in the immediately preceding second quarter, the company reported sales of $81.3 million. International sales represented 52 percent of revenue for the third quarter of 2009, up from 43 percent in the previous.

Harmonic recorded a Q3 net income of $2.6 million, compared with net income of $12 million in Q3 ‘08.

CFO Robin Dickson reported that: “By market segment, cable customers accounted for 56 percent of revenue, satellite 21 percent, and telcos and others 23 percent. This translates into sequential growth in both our satellite and telco businesses. But, at the same time, we saw a sequential decline in revenue among our cable customers. This third-quarter decline may seem surprising following the strong performance of the cable market in Q2, and we think it’s mainly due to the unpredictable nature of order timing from quarter-to-quarter, as we’ve now seen improved order input in October from several key cable customers.”

Dickson’s comments came during an analyst call-in, according to a transcript prepared by Seeking Alpha.

“In the third quarter, our largest customer was once again Comcast, representing 15 percent of total revenue, while EchoStar contributed 10 percent,” Dickson continued. “It’s also worth noting that for both the third quarter and year-to-date, our top 10 customers represented less than 50 percent of our revenue, showing that our international growth and the Scopus acquisition are helping us to meet our strategic goal of customer diversification.”

Looking ahead, the company said it anticipates net sales for the fourth quarter of 2009 will be in a range of $80 million to $86 million.

Patrick Harshman, Harmonic’s president and CEO, during the conference call said: “I think this time last year the storm clouds were just kind of coming in, although the business was going quite well. … There was a fair amount of uncertainty that was starting to build. I think right now, not that there’s not uncertainty about the short term, but I think that we’ve seen the worst, and while we don’t know exactly what the level of spending will be, we think our customers are going to spend more, and we know that we’re even better positioned from a technology perspective, from a competitive position and from a breadth of customer perspective. We can’t invent customer spending in 2010, but to the extent it’s going to come back and we believe it will, we just don’t know how strongly, we think we’re extremely well positioned to take advantage of it.”

More Broadband Direct 10/29/09:
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•  Int'l sales help Harmonic stay the course in Q3
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