Driven by sales to its longstanding cable and satellite customers, Harmonic announced that sales for its first quarter, ended March 28, were up 24 percent compared with the same quarter a year ago.
For the first quarter of 2008, the Sunnyvale, Calif.-based company reported net sales of $87.3 million, up from $70.2 million in the first quarter of last year. Harmonic said the strong year-over-year revenue growth reflected continued success with longstanding domestic cable and satellite customers, as well as sales to an expanding range of new customers worldwide that are deploying a variety of new video services.
Sales to the cable industry topped Harmonic’s revenues, followed by the satellite and IPTV industries.
Harmonic said its international sales grew proportionately to domestic sales and represented 39 percent of revenue for the first quarter of 2008, compared with 40 percent in the same period of 2007.
The company achieved higher gross margins in the first quarter of 2008, both year-over-year and sequentially, as it continued to execute its strategy to develop and acquire new products and technologies. In particular, the improvement in gross margins reflected increased deployments of Harmonic’s new edgeQAM products for video-on-demand (VOD), switched digital video (SDV) and modular cable modem termination system (CMTS) applications worldwide. Harmonic’s eQAM was one of the eQAMs that was selected by Comcast last year.
In recent periods, including the first quarter of 2008, gross margins also improved from sourcing and cost efficiencies on higher volumes, as well as from product design innovations, Harmonic said.
The company’s net income for the first quarter of 2008 was $13.4 million, or 14 cents per diluted share, up from $1.1 million, or 1 cent per diluted share, for the same period of 2007. Excluding non-cash accounting charges for stock-based compensation expense and the amortization of intangibles, net income was $16.6 million, or 17 cents per diluted share, up from $5.3 million, or 7 cents per diluted share, for the same period of 2007.
As of March 28, Harmonic had cash, cash equivalents and short-term investments of $278.9 million, up from $269.3 million as of Dec. 31, 2007.
“We are very pleased with our strong operating performance in the first quarter, with both sales and gross margins exceeding expectations,” said Patrick Harshman, president and CEO of Harmonic. “We saw strong revenue from our domestic cable and satellite customers as they continue to expand their on-demand and high-definition channel offerings. We also continued to see strong growth outside of the U.S. as we extended our global customer base throughout Europe, Asia and Latin America.”
Harmonic anticipates that the combined net sales for the second and third quarters of 2008 will be in the range of $170 million to $180 million, and that gross margins will be 46 percent to 48 percent.
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