Harmonic announced that its revenue for the first quarter of 2012 was $127.7m, a decline of 4% versus the same period a year ago, and a decline of 11% versus the previous quarter. The results were at the high end of the company’s negative pre-announcement, but well below the guidance of $132m to $142m the company issued last quarter
The company attributed its lower than expected sales performance to an unexpectedly slow order rate in the early part of the quarter and a decline in demand from European customers throughout the quarter. On a more positive note, bookings in the first quarter of 2012 were approximately $142.5m, up 8% versus the first quarter of 2011. Service revenue was also strong in the quarter.
Harmonic’s GAAP net loss for the first quarter of 2012 was $7.5m, compared to GAAP net income of $500,000 last year. Non-GAAP net income for the quarter was $3.2m, versus non-GAAP income of $10.3m last year.
GAAP gross margins for the quarter were 42% versus 47% last year. On a non-GAAP basis, gross margins for the quarter were 47% versus 51% last year. The company said that its gross margins for the quarter were impacted by a revenue mix with lower video processing sales and increased cable edgeQAM sales, which initially carry lower gross margins, but are expected to enable future sales of higher margin software licenses as network traffic increases.
Operating margins were -7% versus 0% last year. Non-GAAP operating margins were 3% versus 10% last year.
“We got off to an unusually slow start in the first quarter and our European business remained soft throughout the quarter, but our bookings growth in other geographies underscores the fundamental strength of our business,” said Patrick Harshman, president and chief executive officer. “During the first quarter, we saw robust demand for our HectoQAM product and record professional services and support bookings. We’re also encouraged by the positive customer response to the introductions of our powerful new playout, distribution and multiscreen delivery solutions.
“While we have uncertain near-term visibility regarding our European business, we continue to expect sequential growth in the second quarter and believe that the global proliferation of video content and media outlets, along with increasing demand for higher quality video in every format delivered over bandwidth constrained networks, plays to our core strengths.”
Harmonic said it anticipates net revenue in a range of $130m to $140m for the second quarter of 2012. GAAP gross margins and operating expenses for the second quarter of 2012 are expected to be in the range of 44% to 46% and $62m to $63m, respectively. Non-GAAP gross margins and operating expenses for the second quarter of 2012, which will exclude charges for stock-based compensation and the amortization of intangibles, are anticipated to be in the range of 49% to 51% and $56m to $57m, respectively.
Press release: Harmonic Announces First Quarter 2012 Results
Previous Quarter: Harmonic Announces Results for Q4 and Full Year 2011
Previous Year: Harmonic Q1 2011 Revenue Jumps Fifty-Seven Percent
© Devoncroft Partners. All Rights Reserved