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Cable/Video

BigBand Hits a Sour Note

Digital video specialist BigBand Networks Inc. (Nasdaq: BBND) is laying off 9 percent of its workforce, approximately 40 people, and consolidating "certain facilities" -- moves that will cut annual costs by roughly $8 million.

BigBand revealed those details in a preliminary fourth-quarter earnings release, showing that the company expects to report in-line revenues of $26 million and a GAAP net loss of 9 cents per share.

The company said the layoffs and facility changes aim to streamline its operations. It expects to take a one-time $2 million hit in the first quarter of 2011 as a result. It laid off 6 percent of its workforce, roughly 30 people, last May. (See BigBand Cuts Staff as Orders Dry Up .)

BigBand's scheduled to report earnings on Feb. 1. A company official confirmed that BigBand's not shutting down any facilities, but is consolidating some of them because it had extra space.

Why this matters
BigBand, a key supplier of cable edge QAMs and switched digital video technology, endured a rough 2010 marked by sluggish sales of edge QAMs and SDV equipment that it hopes to be temporary while it tries to gain traction with new products, including vIP PASS, which provides cable operators with a migration path to IP video, and the Media Services Platform (MSP) 2000 platform, a unicast device targeted mostly to the telco IPTV sector.

During 2010, it also lost out on an important edge QAM contract with Time Warner Cable Inc. (NYSE: TWC) that ended up benefiting rival supplier Arris Group Inc. (Nasdaq: ARRS) the most. (See Arris Wins at Time Warner Cable .)

Comcast Corp. (Nasdaq: CMCSA, CMCSK) is expected to ramp up SDV deployment efforts. It's picked BigBand as an approved SDV supplier, but it hasn't announced any SDV-related purchase orders from the vendor. (See Comcast Getting Ready to Uncork SDV.)

For more
For more on BigBand's turbulent 2010, please check out the following stories:



— Jeff Baumgartner, Site Editor, Light Reading Cable

Jeff Baumgartner 12/5/2012 | 5:15:36 PM
re: BigBand Hits a Sour Note

Morgan Keegan's Simon Leopold was among the first to react to this news, and doesn't think this means a recovery is just around the corner.  Leopold, in a note issued last night, said the cost cutting will yield a better bottom line for 2011 than previously modeled, but says there's still "doubt a turn-around is imminent."


He has dropped his 2011 sales estimates to $109.6M from $119.7M, with losses


improving to 9 cents per share, versus 16 cents per share.  He's got a $3 target on the stock, which will open today at $2.80. JB





 




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