Terayon Reports Improved 2Q


Terayon Communication Systems Inc. made good on its estimates of a better
second quarter, posting losses that were lower than estimated.

The Santa Clara, Calif.-based maker of cable data and video gear reported
losses of $13.1 million, or 18 cents per share, a fair increase from the $3.7
million loss in the second quarter of 2002 but lower than 20-cent-per-share
analysts’ estimates.

The loss was an improvement compared with the $24 million loss the vendor
racked up in the first quarter.

The results fell in line with raised estimates Terayon issued at the end of
June. Revenue totaled $30.6 million, a 37% increase compared with $22.4 million
gathered in the same quarter in 2002.

The company is seeing strong interest in its Data Over Cable Service
Interface Specification 2.0 products, including the industry’s only DOCSIS
2.0-qualified cable-modem-termination system.

"In addition, we believe we are well positioned to capitalize on our DOCSIS
2.0 and digital-video leadership positions as the cable industry works to meet
the bandwidth-management challenges presented by the expected growth of
high-definition TV, video-on-demand and new IP-based [Internet protocol]
services required to compete against telecom and satellite offerings," CEO Zaki
Rakib said in a release.

"Going into the second half of 2003, we remain focused on achieving
sustainable profitability through growing revenues, improving margins via
product-cost reductions and prudent operating-expense management," he added.

For the third quarter of 2003, Terayon now expects revenue to come in between
$33 million-$36 million, with net loss trimmed to between 14 cents and 16