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

To: BillyG who wrote (38118)	1/8/1999 4:07:00 PM
From: DiViT	Read Replies (1) \| Respond to of 50808

Digital Means Dollars For Scientific-Atlanta (01/08/99, 3:26 p.m. ET) By Sergio G. Non, TechWeb techweb.com If Scientific-Atlanta's second quarter was any harbinger, the digital set-top box has arrived. Shares of the Atlanta-based maker of devices for cable and satellite communications advanced as much as 4 to 31 1/4 in Friday trading on news that the company will report better-than-expected second quarter results. Scientific-Atlanta said it expects to report sales of $308 million, more than 17 percent higher than the average analyst estimate of about $262 million, and up more than 4 percent year-over-year. Earnings per share, the company added, will also be higher than the 6 cents a share predicted by First Call's survey of 14 analysts. Scientific-Atlanta is scheduled to report final quarterly results Jan. 28. Scientific-Atlanta stock was at 28 15/16, up 1 11/16 in midafternoon trading. Surprisingly robust shipments of the Explorer 2000 digital TV set-top boxes and higher sales of digital transmission products fueled growth. Scientific-Atlanta shipped 126,000 set-top boxes, more than twice what many analysts expected. The company also boosted shipments of new head ends that coordinate traffic on digital cable networks, said Lawrence Harris, analyst with Josephthal & Co. This week's news marks a sharp turnaround from the previous quarter, when Scientific Atlanta reported disappointing sales of digital cable products. Time Warner Cable, whose network is the second-largest cable system in the United States, bought 100,000 of the digital boxes for the Austin, Texas, market and other regions. And with Time Warner committed to buying at least 1.1 million units total and up to 1.6 million, Scientific-Atlanta should continue to do well, Harris said. "I would anticipate the company's operating results should improve on a sequential basis," he said. "We would expect deliveries to Time Warner to continue. In addition, other cable operators, such as Cox, will be turning on Scientific-Atlanta's system over the next few weeks." Set-top boxes contributed $45 million to $50 million in second quarter sales, Harris estimated. While that's not a large percentage, the company did extremely well to ship so many more units than expected. "Remember, it's the amount above expectations that matters," said Harris, who had figured the company would ship 50,000 boxes in the quarter. Many analysts have said set-top makers such as Scientific Atlanta and General Instruments should thrive as cable companies upgrade their systems for telephone service, high-speed Internet access, and DTV. The rollout seems to be speeding up: AT&T reaffirmed plans Friday to spend $2 billion to upgrade the cable network of Tele-Communications Inc.