John R. It would be nice if Pegasus is OPEN CABLE. Have you figured out who puts the decoders into those units?
Scientific-Atlanta sees digital growing
FORT LAUDERDALE, Fla., Nov 21 (Reuters) - Scientific-Atlanta Inc said Friday it expects the cable television industry to reap digital revenues of $2.5 billion by 2005 as it embraces the two-way interactive digital technology being developed by the company.
The manufacturer of cable television set-top and transmission equipment said at a Southeast Research Partners Inc investors' conference that the digital technology would be an area of major growth for the company over the next 10 years.
''In about 2005, digital revenues for the cable industry are projected by sources to be $2.5 billion,'' corporate vice president Bob Meyers said.
''Today, it's virtually nothing. Today, everything is analog. The conclusion is that digital is going to become a very important market for us,'' he said.
''Clearly, we have great expectations that it will be a significant contribution to the company in the years ahead.''
Meyers said cable operators were just beginning to develop their approach to digital and these companies were Scientific-Atlanta's customers.
He said the benefits of digital technology would be utilized as early as next year.
''It's just starting on the digital and one of the pioneers in the two-way, real-time technology is Time Warner Inc (NYSE:TWX - news),'' Meyers said.
''They call it Pegasus and it will roll out in early calendar 1998. And we are their supplier for that.''
Scientific-Atlanta chief financial officer Harvey Wagner said the company was aiming to increase its international business to 50 percent of its total versus its current 35-38 percent.
''We are looking at acquisition opportunities all over Europe and in the U.S.,'' Wagner said.
Scientific-Atlanta saw 12.5 percent revenue growth in the 1997 fiscal year ended in June, reporting a record $1.17 billion in revenues. Its earnings from continuing operations before income taxes were $89.2 million.
''We believe that as the market on digital continues ... that we, in the next few years, should be able to reach a 35 percent gross margin,'' Wagner said.
Scientific-Atlanta has recently come through a major restructuring and manufacturing reorganization.
The company's two main areas of growth in the near-term are advanced analog and digital technology and its potentially ''breakthrough'' Low Earth Orbit (LEO) Satellites, currently undergoing trials.
''LEO's are very exciting,'' Meyers said. ''It's a potential breakthrough for us. It could really take off for us.''
Scientific-Atlanta's shares were off 1/4 to 20-1/2.
Is it possible for the set-tops of SFA to become the receivers for something like Iridium? |
