Harmonic Lowers 1Q12 Forecast
Slowdown in Europe, lower gross on cable platform cited
April 11, 2012
SAN JOSE, CALIF.: Harmonic revised its expectations for the first three months of the year based on a decline in orders from Europe and lower margins on a cable platform it sells. The company said it now expects to post net revenues between $125 million to $128 million for the quarter ending March 30, 2012. Harmonic previously expected to come in between $132 million and $142 million.
Non-GAAP gross margin is now expected to be in the range of 46 to 48 percent, compared to the company’s previous guidance of 50 to 52 percent. Non-GAAP operating expenses are expected to be in the range of $56 million to $57 million, in line with the previous guidance. Non-GAAP income per share is expected to be in the range of 2 to 3 cents per diluted share.
Preliminary total bookings for the first quarter of 2012 were approximately $142.5 million, up 8 percent from $131.6 million in the first quarter of 2011.
“Although total bookings met our expectations, our first quarter revenue was adversely impacted by the slower than expected order rate in the early part of the quarter and a decline in demand from our European customers,” said Patrick Harshman, president and CEO. “Additionally, a higher percentage of our first quarter bookings were associated with professional services and support agreements that will be recognized as revenue in future periods.”
“The first quarter was also characterized by stronger-than-expected demand for our new HectoQAM cable edge platform,” he said. “These new HectoQAM deployments initially carry lower gross margins, but are expected to enable future sales of QAM software licenses as network traffic increases. The combination of lower digital video processing sales in Europe and increased cable edge sales impacted our gross margins in the first quarter.
“Looking ahead, our bookings growth and expanding footprint lead us to expect sequential growth in the second quarter and, more generally, point to the fundamental strength of our business.”
Harmonic noted that the results are preliminary and may change. Final 1Q12 results will be issued April 24.