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Technology Stocks : C-Cube -- Ignore unavailable to you. Want to Upgrade?

To: John Rieman who wrote (48517)	1/29/2000 7:25:00 PM
From: Maya	Respond to of 50808

FWIW, HLIT is the stock of the week at stockspecials.com: stockspecials.com Stock Special of the Week for January 31st - February 5th HARMONIC HLIT: $96.56 Harmonic designs, manufactures, and markets digital and fiber optic systems for delivering video, voice, and data over cable, satellite, and wireless networks. These advanced solutions enable cable television and other network operators to provide a range of broadcast and interactive broadband services that include high-speed Internet access, telephony, and video-on-demand. During the fourth quarter of 1999, Harmonic announced it would acquire the DiviCom unit of C-Cube Microsystems (CUBE). DiviCom is a leading developer of MPEG-2 encoding systems for digital video. This addition will position Harmonic as a leading supplier of solutions for delivering video, voice, and data over a variety of network architectures. The transaction is expected to close by the end of March. The combination with DiviCom will double the size of HLIT, allow them to offer more complete solutions for cable operators, and will expand their penetration into telecommunications, satellite, wireless, and other emerging broadband markets. For the fourth quarter of 1999, Harmonic reported sales of $63.3 million, up 134% from $27.1 million for the fourth quarter of 1998. Net income for the fourth quarter of 1999 was $10.8 million or $0.33 per share, a dime higher than analystsƒ?? expectations. For 1999, Harmonic reported sales of $184.1 million, up 119% from $83.9 million for 1998. Net income for 1999 was $23.7 million or $0.76 per share, compared to a net loss for 1998. Growth should remain strong for Harmonic in the years to come as cable operators continue to upgrade their systems for broadband capabilities and capacity. Harmonic experienced strong demand for its fiber optic products across its worldwide base of cable customers during the fourth quarter. Domestic sales increased 197% from the fourth quarter of 1998. While AT&T continued to be Harmonic's largest single customer, non-AT&T sales were up 72 percent sequentially. International sales increased across all regions, up 47% from the fourth quarter of 1998. Harmonic will most likely be a beneficiary of the pending America Online/Time Warner merger. Itƒ??s clear that it is the combined companyƒ??s intent to rapidly rollout broadband services over Time Warnerƒ??s infrastructure. Quicker adoption of broadband will benefit HLIT, as they are a leading provider of fiber optic systems for the cable industry. Earnings at Harmonic are expected to be $1.00 in 2000 and $1.33 in 2001. Analysts, all nine of who have ƒ??buyƒ?? ratings on HLIT, project that the company will grow 36 percent annually for the next five years. These earnings estimates are likely quite conservative given that fourth quarter earnings at HLIT were $0.33, ten cents above expectations. I expect sales in 2000 to come in over $300 million without the Divicom acquisition), so the stock ƒ??s price-to-sales ratio of just over nine times is quite reasonable. The Stock Specialistƒ??s twelve-month price target for HLIT stock is $150 per share.