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

To: Maya who wrote (49137)	4/24/2000 10:01:00 PM
From: Helios	Read Replies (1) \| Respond to of 50808

Ouch cbs.marketwatch.com C-Cube earnings come up short By Greg Winter, CBS MarketWatch Last Update: 8:55 PM ET Apr 24, 2000 NewsWatch MILPITAS (CBS.MW) -- C-Cube Microsystems Inc. announced first quarter earnings Monday that fell far short of Wall Street's expectations. The maker of semiconductors for DVD players and cable TV boxes reported revenues of $61 million, up 4.8 percent from the same period last year. But its earnings fell to 3 cents per share, down 28 cents from the year-ago period. Analysts polled by First Call had been anticipating 36 cents per share for the quarter. C-Cube (CUBE: news, msgs) attributed the drop-off in earnings to the cost of selling its systems management and consulting division, known as DiviCom, to rival Harmonic Inc. The $1.7 billion stock swap has received shareholder approval and could be completed within a few weeks, the company announced today. Beyond giving rise to a host of consultancy fees, the merger agreement, announced Oct. 27, 1999, required all C-Cube employees to exercise their vested stock options before completion of the deal. That hit the company with roughly $3.4 million in what it called "extraordinary taxes," whittling away at its profit margin. After letting go of its DiviCom division, C-Cube's sole remaining business is manufacturing semicondutors for companies like Hitachi and Toshiba, an area that has traditionally brought in 55 percent of the company's revenue. But recently, C-Cube's semiconductor revenue has flattened and even declined, as video CDs sales failed to take off. As a result, the company switched to making semiconductors for the fast-growing DVD, cable TV and recordable CD market. Shares of C-Cube shed 4 7/8, or 8.2 percent, to 54 5/8. The earnings report, released after the bell, drove the stock down an additional 2 1/8 to 52 1/2 in after hours-trading. Greg Winter is an online reporter for CBS MarketWatch.