[Satellite News 05-06-09] End-to-end broadcasting solutions provider Harmonic suffered heavy losses in its 2009 first quarter financial report, the company announced May 5.
    CFO Robin Dickson said the 22 percent drop in Harmonic’s revenues to $67.8 million were the result of compounded losses in orders between the last two quarters. “Our bookings in the fourth quarter were down significantly from the third quarter, and we saw another, albeit, smaller decline in bookings in [the first quarter of 2009]. Orders started to pick up in March but not as strongly as the historical seasonal pattern with consequent impact on our [first quarter] revenue. In April we’ve seen a more robust pace of orders giving us optimism that we hit the bottom during [the first quarter],” said Dickson.
    Harmonic reported a first quarter loss of $18.8 million, compared with net income of $13.4 million in the same period 2008.
    Harmonic enters the second quarter with a backlog of $75 million — includes $10 million inherited from recently acquired Scopus — its smallest backlog in several years, Dickson said. The company predicted second quarter revenues of $72 million to $78 million.
    “While we don’t feel comfortable giving full year guidance in this still very uncertain environment, recent historical patterns suggest that about 55 percent of our revenue is recorded in the second half of the year. Whether this pattern will repeat itself in today’s very unusual circumstances remains to be seen and we expect the global economic situation to continue to create substantial uncertainty,” she said.
    After the announcement, trading in Harmonic dropped to $6.50 a share from its May 5 opening price of $7.73.
    Harmonic CEO Patrick Harshman said that with customer sales dropping in areas of Western and Eastern Europe, the company expects its international figures to decrease as well, despite contributions from Scopus. “I don’t expect international [sales] to be up sequentially. I think we saw some good strength carrying over from bookings last year. However as we noted I think as a whole international bookings were relatively more challenged than domestic bookings in the past quarter and therefore I think you’ll see the manifestation of that in the second quarter revenue,” he said.
    Harshman said that even though the company’s financials were disappointing, the company used the quarter to strengthen its technology market share by expanding its range of applications, customers and target regions. Harshman named video technology its top priority and pointed to the release of its Electra 800 encoder for MPEG-2 and MPEG-4.
    “We expect this product to be used extensively by operators not only for adding new channels but also to buy back bandwidth for channels already deployed. In the cable environment, for example, upgrading with this technology can reduce the bandwidth required for an HD program by over 30 percent, and it can have a significant bandwidth savings impact for satellite and traditional broadcast operators as well,” he said.
    Harmonic also is intensifying its activity in working with RaySat in driving AT&T CruiseCast service for delivering video to vehicles, Harsham said.