Harmonic -10.7% on Q2 warning

|About: Harmonic Inc. (HLIT)|By:, SA News Editor

Harmonic (HLIT) expects Q2 revenue of $108M-$110M and EPS of $0.00-$0.02, below a consensus of $117.2M and $0.06. Gross margin is expected to be in a range of 49%-51%, below prior guidance of 52.5%-53.5%.

Moreover, the company expects Q3 revenue of $103M-$113M, below a $122.7M consensus. Gross margin is expected to be in a range of 52%-53%.

Q2 bookings are expected to total $113.4M, -10% Y/Y. Backlog and deferred revenue amounted to $132.1M at the end of Q2, up from $126.4M at the end of Q1 but down from $132.5M a year earlier.

CEO Patrick Harshman: "We saw a global slowdown in our video business as several of our larger customers began planning for our new virtualized approaches for delivering video services." The weakness was pronounced among EMEA and North American broadcast/media clients, thanks to product delays and "growing consideration" for Ultra HD (4K) and HEVC compression formats.

North American cable demand was healthier, including for Harmonic's NSG Pro transmission systems. The company remains "cautious" about near-term results.

Full Q2 results arrive on July 28. Rival Arris (just digested Motorola's pay-TV hardware unit) has been performing better.