Harmonic earnings rehashed; CEO Ley admits Divi caused "a bit of indigestion"; says T's biz to pick up again later in the year...
news.excite.com
Harmonic CEO Says 1Q Gross Margin Improved To 47%
Updated 4:19 AM ET April 20, 2000
(This report was originally published late Wednesday.)
By Janet Whitman
NEW YORK (Dow Jones)--Harmonic Inc. (HLIT) Chairman and Chief Executive Anthony Ley said Wednesday that the company improved its gross margin to 47% in the first quarter, and will target gross margins of 45% going forward.
Speaking to Dow Jones Newswires following the release of the company's quarterly earnings, Ley added that Harmonic's revenue for the first quarter was at the high end of analysts' expectations.
Harmonic reported net sales of $62.9 million, up 108% from $30.3 million for the first quarter of 1999.
"I don't think people expected us to do that," said Ley. "We kept our operating expenses under control, so we had very good profitability."
As reported, the cable-equipment company's earnings for the quarter were 28 cents a share, exceeding First Call/Thompson Financial's estimate of 22 cents.
Harmonic will continue driving down manufacturing costs by improving factory efficiency, increasing sales volumes and redesigning products, said Ley.
The company's planned acquisition of C-Cube Microsystems Inc.'s (CUBE) DiviCom unit is expected to close next month, he said. Divicom provides digital television services.
"Our products are complimentary," he said. "By this merger we will double the size of our company."
The company will consider further acquisitions in the fiber, beta, and digital areas, he said, but added: "I think we got a bit of indigestion with this one. This is a big one. We will be very selective."
While AT&T Corp. (T) remained Harmonics' largest single customer, its share of the company's business shrank to 28% in the first quarter, down from about 30% to 40% last quarter, said Ley.
Seasonal factors and a less business from AT&T contributed to the drop, he said. "AT&T's been building at a tremendous rate, so they've had to slow down a bit. They couldn't go on building at that rate. We believe it will come back later in the year."
Ley said the rush to upgrade cable systems will continue to fuel demand for cable-equipment companies.
Harmonic designs, manufactures and markets digital and fiber optic systems for delivering video, voice and data over cable, satellite and wireless networks.
By Janet Whitman; Dow Jones Newswires
201-938-5248; janet.whitman@dowjones.com |
