News

Challenges Await S-A

12/23/2001 7:00 PM Eastern

Lehman Brothers Inc. initiated coverage of Scientific-Atlanta Inc. with a "market perform" rating. But it warned that despite being "favorably impressed," a decline in MSO purchasing would translate to challenging times for the set-top maker. "Cable-operator capital spending is declining worldwide, and we believe cable operators are holding digital set-top box inventories while also experiencing a slowdown in digital subscriber growth rates," Lehman analyst Andrea Green wrote in a research note. Green wrote that she expected next year to be down in terms of revenue and cash-flow growth, adding that 2003 revenue and earnings should be relatively flat. Shares of Scientific-Atlanta closed at $22.65 on Dec. 19, up 23 cents.

March