Harmonic plunges on warning

2 min read

Harmonic Inc. (Nasdaq: HLIT) was down 40 percent ahead of Thursday's opening bell after announcing that its third quarter revenue would be below expectations, and it would report a loss rather than a profit.

Revenue is expected to be $71 million to $73 million for the third quarter. Net loss, excluding adjustments for amortization of goodwill and other intangibles, is expected to be 6 to 9 cents a share. First Call was expecting a profit of 12 cents a share.

Shares in the company were down 9.06 to 13.75 on the Island ECN. The company also warned it would miss estimates last quarter.

Part of the decrease in revenue is attributed to slowing sales for the company's Broadband Access Networks division, which makes fiber optic products in broadband cable networks.The division expects revenue of $43.5 million to $44.5 million for the quarter, compared to divisional revenue of $53.2 million in the previous quarter.

Harmonic's Convergent Systems division, which makes digital headend systems for broadband networks, will have revenue of $27.5 million to $28.5 million, slightly higher than the $26.8 million posted in the previous quarter.

"While we are disappointed with the slowdown in our business, our worldwide base of cable customers continues to work closely with us to execute their long-term plans to upgrade and expand their broadband infrastructures," CEO Anthony J. Ley said.

"While we expect to also report a pro forma net loss in the fourth quarter of 2000, we anticipate increasing sales levels in the coming year," Ley added.

Including the effects of purchase accounting adjustments, Harmonic expects to report a net loss on a GAAP basis for the third quarter of $1.63 to $1.66 per share. These adjustments arise from the acquisition of the DiviCom business from C-Cube Microsystems Inc. (Nasdaq: CUBE) on May 3, and the acquisition of Cogent Technologies Inc. on July 1.

The company expects to announce actual results on October 18.