& 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.   
From The Founder
Download our complete guide to de-risking NFV deployment in 2016, including:
  • An eight-step strategy to deploying NFV safely, based on input from the companies that have already started virtualizing their production networks.
  • Interviews with leading executives at Colt, AT&T, Deutsche Telekom, Cisco, Nokia, ZTE, Ericsson and Heavy Reading.
  • Flash Poll
    Live Streaming Video
    Prepping for the Future: Upskill U Explained
    During this short kick-off video, Doug Webster, Vice President of Service Provider Marketing, Cisco, and Light Reading’s CEO & Founder Steve Saunders give an overview of Upskill U.
    LRTV Interviews
    Demand Surges for On-Demand Ads

    5|5|16   |     |   (0) comments


    Ed Knudson, VP, Product and Strategy at Canoe Ventures, discusses the rising appeal of VoD ads and the challenges on inserting ads dynamically in live TV programming.
    LRTV Custom TV
    Exclusive: Video Interview With Sckipio CEO David Baum

    5|5|16   |     |   (0) comments


    At his headquarters in Tel Aviv, G.fast visionary David Baum, CEO of Sckipio, provided an exclusive interview to Light Reading and showed how innovations in rate and reach, vector densities, fast reconnecting times and SFP-based residential gateways are expanding the potential of G.fast.
    Telecom Innovators Video Showcase
    Atrinet's NetACE – Migration to NFV & SDN With NetOps-Driven LSO

    5|4|16   |     |   (0) comments


    At Atrinet's headquarters, Ray Le Maistre sits down with Roy Silon to get an in-depth look into the company's focus and the secret recipe for their success.
    LRTV Huawei Video Resource Center
    Amsterdam ArenA, Powered by Huawei

    5|4|16   |     |   (0) comments


    Huawei's ICT solutions power the state-of-the-art Amsterdam ArenA, turning it into a smart stadium.
    LRTV Interviews
    Testing When There's No 'There' There

    5|4|16   |     |   (0) comments


    The benefits of SDN/NFV are well known, but the transition comes with some challenges, prominent among them is: how do you test a network that has been abstracted and has the potential to be endlessly reconfigurable? Light Reading was at NFV World Congress in Santa Clara, Calif., where we bumped into Mats Nordlund, CEO and co-founder of Netrounds, a Swedish ...
    LRTV Interviews
    Ditching the Slash & the Orchestration Wars

    5|3|16   |     |   (2) comments


    SDN and NFV have been inextricably bound with each other for so long that on a conceptual level, smooshing them together into one catch-all phrase – SDNFV – is now justifiable, according to Dan Pitt, executive director of the Open Networking Foundation (ONF). Light Reading spoke to Pitt at the NFV World Congress, where he explained that the next ...
    LRTV Custom TV
    ZTE TV Connect Highlights

    5|3|16   |     |   (0) comments


    ZTE gives us a tour of its booth and new products at TV Connect in London.
    LRTV Custom TV
    Deluxe's Unified Delivery Solution

    5|3|16   |     |   (0) comments


    Join Alan Breznick of Light Reading and visit the Deluxe booth at NAB! Here you'll find Deluxe's Unified Delivery Solution, OTT video, virtual reality, HDR, 4K and much more!
    LRTV Interviews
    Verizon Puts Gray Boxes in the Shade

    5|2|16   |   04:33   |   (1) comment


    When it comes to the white box trend, "gray" boxes, which have a slight proprietary twist, don't give service providers and end users the advantages they're seeking, according to Verizon's Vice President of Product and New Business Innovation Shawn Hakl.
    LRTV Custom TV
    Dealing With a Disrupted Video Market

    5|2|16   |     |   (0) comments


    Ericsson's Simon Frost discusses how traditional pay-TV providers can cope with the big changes wrought by the rise of OTT video and IP technology.
    LRTV Custom TV
    The VNF Responsibility of Red Hat

    5|2|16   |     |   (0) comments


    At MWC, Caroline Chappell of Heavy Reading visits the Red Hat booth and sits down with Chris Wright to talk about the responsibility the VNF needs to take on in order to ensure the operators get the carrier-grade performance they expect for their network.
    LRTV Interviews
    AT&T Expert on the Key Pillars of UC

    4|29|16   |   03:58   |   (0) comments


    Vishy Gopalakrishnan, AVP of product marketing at AT&T, talks about the three developments that are making unified communications and collaboration secure and reliable for enterprise users.
    Upcoming Live Events
    May 23, 2016, Austin, TX
    May 23, 2016, Austin Convention Center
    May 24-25, 2016, Austin Convention Center, Austin, TX
    September 13-14, 2016, The Curtis Hotel, Denver, CO
    December 6-8, 2016,
    June 16-18, 2017, Austin Convention Center, Austin, TX
    All Upcoming Live Events
    Infographics
    A new survey conducted by Heavy Reading and TM Forum shows that CSPs around the world see the move to digital operations as a necessary part of their overall virtualization strategies.
    Hot Topics
    Amazon AWS Reports $2.6B Quarterly Revenue, Up a Colossal 64%
    Mitch Wagner, West Coast Bureau Chief, Light Reading, 4/28/2016
    WiCipedia: Woman Cards & Bitch Switches
    Sarah Thomas, Director, Women in Comms, 4/29/2016
    Sprint CEO: Our Spectrum Is for 5G
    Dan Jones, Mobile Editor, 5/3/2016
    Amazon & Other 'Big 4' Cloud Providers Crushing Competitors
    Mitch Wagner, West Coast Bureau Chief, Light Reading, 4/29/2016
    Rovi Reels in TiVo for $1.1B
    Mari Silbey, Senior Editor, Cable/Video, 4/29/2016
    Like Us on Facebook
    Twitter Feed
    BETWEEN THE CEOs - Executive Interviews
    In this latest installment of the CEO Chat series, Craig Labovitz, co-founder and CEO of Deepfield, sits down with Light Reading's Steve Saunders in Light Reading's New York City office to discuss how Deepfield fits in with the big data trend and more.
    Grant van Rooyen, president and CEO of Cologix, sits down with Steve Saunders, founder and CEO of Light Reading, in the vendor's New Jersey facility to offer an inside look at the company's success story and discuss the importance of security in the telecom industry.
    Animals with Phones
    Sloth Mail Click Here
    Sloth mail -- somehow even slower than snail mail.
    Live Digital Audio

    Of all the tech companies in the Valley, Intel has made the most aggressive commitment to building a diverse and inclusive workplace culture. It's doing so by taking concrete, measurable steps, making a large financial investment and through a commitment to complete transparency about its progress. In this radio show, WiC Director Sarah Thomas will be joined by Shlomit Weiss, Intel's Vice President, Data Center Group, and General Manager of Networking Engineering, who will share with us why Intel is tackling this huge challenge, how and to what effect. She will also discuss her unique experiences leading development of Client SOC development in the past and today leading development of all of the chipmaker's silicon hardware for networking IPs and discrete devices and managing a team of 600 engineers across Israel, Europe and the US.