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Arris reported generally positive fourth quarter earnings for 2017, though customer premises equipment revenues were down, in part due to a decline in video set-tops.

Overall, Arris saw a slight decline in revenue for the fourth quarter, down 1 percent to $1.73 billion.

CPE revenues were $1.09 billion for the quarter, down from $1.26 billion in the year-ago period.  Revenue for video set-tops declined 13 percent year over year, as the market shifts toward lighter-weight IP-based boxes.

“As we enter 2018, the team continues to sharpen the focus on enhancing the economics within the CPE business and we are taking a number of steps to improve efficiency,” Arris’s CEO Bruce McClelland said Wednesday on the company’s earnings call.

“We are in extensive discussions with customers to adjust pricing to reflect increased memory costs and are being increasingly more selective on the projects that we pursue,” he added.

On the positive side broadband device sales increased 7 percent year over year, in part due to growing momentum of DOCSIS 3.1 gateways. McClelland said Arris shipped 1.6 million DOCSIS 3.1 units in 2017, representing 10 percent of total devices shipped.

Also on the bright side, McClelland expects the upgrade cycle for 4K-ready set-tops to accelerate in 2018 and pointed to Arris’ recently announced deal to provide Bell Canada with 4K-supported boxes.

In 2018 Arris expects more gains on the DOCSIS 3.1 front, and is confident about deployment of technologies like Remote PHY and PON as cable operators move toward a distributed access architectures (DAA). Arris is in early DAA trials with customers, and those are expected to reach commercial deployments later this year, McClelland said.

Arris’s network and cloud business was boosted to $596 million, up from $557 million last quarter, in part by strong sales of DOCSIS capacity licenses for its E6000 CCAP platform.

McClelland was also confident on the progress and future potential for revenue from Arris’s recent $800 million acquisition of Ruckus Wireless, which closed December 1. McClelland said the company is projecting 9 percent growth in sales in 2018 thanks in large part to the addition of its new enterprise segment.  

“We're making focused investments around IoT and advanced analytics that levers the scale and extensibility of the Ruckus platform,” McClelland said. “I expect these targeted investments to lead to an expanded portfolio of products and services in 2019.”

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