& cplSiteName &

Harmonic Seeks New Melody in 2014

Mari Silbey
1/30/2014
50%
50%

Although it slightly beat analysts' estimates for per-share earnings in the fourth quarter, Harmonic is seeking to generate fresh revenue growth by shifting its focus to next-generation cable access architecture, multiscreen video, and 4K video in the coming year.

Harmonic Inc. (Nasdaq: HLIT) posted earnings of eight cents per share in the fall period, beating analyst expectations by a penny. But the video equipment specialist still missed its overall revenue target by a hair, disappointing analysts. Harmonic produced quarterly revenues of $120.2 million, slightly below the Wall Street consensus estimate of $120.9 million.

The biggest bright spot for Harmonic at the end of 2013 was a rise in revenue from broadcast and other media companies. In the fourth quarter, the company brought in 42% of its revenue from that segment, while cable customers contributed 35% of the total and satellite and telecom companies accounted for the remaining 23%.

Despite the focus on media customers, Harmonic CEO Patrick Harshman talked at length on the company's earnings call about the strategic importance of its next-generation cable products. In particular, Harshman emphasized the progress that Harmonic has made with its NSG Pro converged cable access platform (CCAP) solution.

Harshman said Harmonic brought in its first CCAP revenue in the fall and also signed up its second customer for the technology, after conducting tests with several North American MSOs. (Both customers so far are unnamed.) Harmonic's CCAP solution starts out as a dense edge QAM product, but the company plans to integrate cable modem termination system (CMTS) functionality into it within a year to a year and a half.

While Harmonic saw healthy margins of 54.3% in the fourth quarter, its CCAP investments could put pressure on that rate going forward. Last quarter Raymond James analyst Simon Leopold expressed concern that Harmonic would have to be aggressive in pricing its CCAP solution to compete better with the other vendors in the hotly contested market. (See Harmonic Grabs CCAP Ring.)

Rivals vying for market share in the still-evolving CCAP market include Cisco Systems Inc. (Nasdaq: CSCO), Arris Group Inc. (Nasdaq: ARRS), Casa Systems Inc. , and CommScope Inc. Arris has already announced CCAP orders from Comcast Corp. (Nasdaq: CMCSA, CMCSK) and Time Warner Cable Inc. (NYSE: TWC), while Casa is working with Time Warner Cable and several international cable providers. Cisco has signed up Cox Communications Inc. as a CCAP customer and just announced a win with Danish operator Stofa. (See Cisco Makes European CCAP Score.)

Also noteworthy in Harmonic's full-year earnings report is the fact that it completed the sale of its Cable Access HFC business last March to Aurora Networks Inc. , which has since been swallowed up by Pace plc . That divestiture aside, Harmonic increased its sales momentum in the second half of the year, with a revenue jump of 11% over the January-to-June timeframe.

Besides CCAP, Harmonic plans to focus its product strategy on Ultra HD and IP multiscreen video solutions in 2014. According to analysts, Harmonic is already the market leader in multiscreen transcoding.

— Mari Silbey, special to Light Reading

(2)  | 
Comment  | 
Print  | 
Newest First  |  Oldest First  |  Threaded View        ADD A COMMENT
albreznick
50%
50%
albreznick,
User Rank: Blogger
1/30/2014 | 11:14:42 PM
Behind the Curve?
Interesting to see that Harmonic remains so committed to CCAP. I wonder where they got their first orders from. It's hard to believe they can keep pace with the CMTS-oriented vendors, who would seem to have the early upper hand here.   
albreznick
50%
50%
albreznick,
User Rank: Blogger
1/30/2014 | 11:14:16 PM
Behind the Curve?
Interesting to see that Harmonic remains so committed to CCAP. I wonder where they got their first orders from. It's hard to believe they can keep pace with the CMTS-oriented vendors, who would seem to have the early upper hand here.   
Featured Video
From The Founder
The 'gleaming city on a hill,' Steve Saunders calls it. But who is going to take us from today's NFV componentry to the grand future of a self-driving network? Here's a look at the vendors hoping to make it happen.
Flash Poll
Upcoming Live Events
September 28, 2017, Denver, CO
October 18, 2017, Colorado Convention Center - Denver, CO
November 1, 2017, The Royal Garden Hotel
November 1, 2017, The Montcalm Marble Arch
November 2, 2017, 8 Northumberland Avenue, London, UK
November 10, 2017, The Westin Times Square, New York, NY
November 30, 2017, The Westin Times Square
All Upcoming Live Events
Infographics
With the mobile ecosystem becoming increasingly vulnerable to security threats, AdaptiveMobile has laid out some of the key considerations for the wireless community.
Hot Topics
Could the Connected Car Help Prevent Terrorism?
Dan Jones, Mobile Editor, 9/15/2017
AT&T Wants to Ditch the Dish
Mari Silbey, Senior Editor, Cable/Video, 9/13/2017
Cities Slam FCC on Broadband Proceedings
Mari Silbey, Senior Editor, Cable/Video, 9/15/2017
Apple's New iPhones: No Gigabit LTE for You!
Dan Jones, Mobile Editor, 9/14/2017
Animals with Phones
Live Digital Audio

Understanding the full experience of women in technology requires starting at the collegiate level (or sooner) and studying the technologies women are involved with, company cultures they're part of and personal experiences of individuals.

During this WiC radio show, we will talk with Nicole Engelbert, the director of Research & Analysis for Ovum Technology and a 23-year telecom industry veteran, about her experiences and perspectives on women in tech. Engelbert covers infrastructure, applications and industries for Ovum, but she is also involved in the research firm's higher education team and has helped colleges and universities globally leverage technology as a strategy for improving recruitment, retention and graduation performance.

She will share her unique insight into the collegiate level, where women pursuing engineering and STEM-related degrees is dwindling. Engelbert will also reveal new, original Ovum research on the topics of artificial intelligence, the Internet of Things, security and augmented reality, as well as discuss what each of those technologies might mean for women in our field. As always, we'll also leave plenty of time to answer all your questions live on the air and chat board.

Like Us on Facebook
Twitter Feed