4Q In Tune for Harmonic2/01/2004 7:00 PM Eastern
Shares in Harmonic rose nearly 24% ($2.07 per share) between Jan. 22 and Jan. 28, after the telecommunications equipment provider reported strong fourth-quarter results.
Revenue rose 43% in the quarter to $56.3 million and net income was $1.4 million (2 cents per share) — its first positive net earnings since March 2000.
The revenue increases were driven mainly by stronger-than-expected sales to cable operators – in a release, Harmonic said headend sales to MSOs increased sequentially to $33.2 million from $29 million, while revenue at its Broadband Access Networks division rose to $23.1 million from $18.3 million from the previous quarter. Cable made up 78% of revenue in the quarter, versus 10% from satellite and 12% from telephone companies.
In a research note, Rodman & Renshaw analyst Daniel Ernst increased his 12-month target price for the stock to $12 per share, adding that Harmonic materially exceeded his forecasts for the quarter. He also increased his 2004 revenue estimates for the company to $238 million from $230 million.
"We believe Harmonic is a significant beneficiary of the escalating digital video war between cable, satellite and broadcast networks," Ernst wrote in his report.