S-A, Antec Reports Disappoint Investors10/25/1998 7:00 PM Eastern
Atlanta -- Cable-equipment maker Scientific-Atlanta Inc.,
which had warned of an earnings shortfall, said last Thursday that it met its reduced
net-income forecast of $2.3 million, or 3 cents per share of stock.
Including an unrealized gain of 16 cents per share, related
to the market value of its stake in chip-maker Broadcom Corp., S-A earned $15 million in
the fiscal first quarter. Without that gain, S-A's net earnings were $2.4 million, or
3 cents per share. In the same period a year ago, it had $16.5 million (21 cents) in net
S-A said it sold 1 million Broadcom shares during the
quarter, for $64 million, and it used the cash to buy 4.6 million of its own shares for
S-A's share price fell by 56 cents, to $15.25. The
company's stock had fallen to as low as $11.75 per share after it warned investors
Oct. 1 that earnings wouldn't meet analyst estimates.
S-A's $257.5 million in quarterly sales was down 13
percent from $294.5 million a year ago and down 15 percent from $305.7 million in the
previous quarter. Domestic sales rose 12 percent from a year ago, but international sales
fell by 50 percent. The international weakness was felt in Asia, Latin America and Europe,
and slower-than-expected digital set-top shipments also affected S-A's quarterly
In addition to the international-sales problems -- which
mainly affected S-A's satellite-supply business -- the company said digital set-top
shipments were slower than expected due to system-integration problems and changes in
operators' deployment patterns.
Meanwhile, cable vendor Antec Corp. reported higher revenue
and net income in its third quarter, versus a loss in the same quarter in 1997.
But a warning about the fourth quarter may have spooked
investors. Antec's share price fell by $2, or 11 percent, to $15.63 last Thursday,
while cable-stock prices generally rose on the day
Norcross, Ga.-based Antec said its quarterly sales, at
$150.3 million, rose 25 percent from a year ago. The company reported $5.3 million in net
income, equal to 14 cents per share of stock, versus a $2 million (5 cent) loss a year
ago. Operating income rose strongly, and sales to key customer Tele-Communications Inc.
were nearly three times higher than in the year-ago quarter and 30 percent higher than the
International sales were off by 25 percent from a year ago,
though. Antec said it expects its international business to improve, but at a slower rate
than it had projected, which might "level out revenue growth in the fourth
Antec chairman and CEO John Egan said in a prepared
statement that the company's fundamentals are strong, and president Bob Stanzione
added that its cable-telephony systems sold well in the quarter.