SeaChange International, Inc. is a developer, manufacturer and marketer of digital video systems and services to cable system operators, telecommunications companies and broadcast television companies.
SeaChange (SEAC) expects to report FQ4 (Jan. quarter) revenue of $34.5M-$35.5M and non-GAAP op. income of $0.01-$0.02/share, below prior guidance of $40M-$45M and $0.15-$0.20/share. The consensus is for revenue of $43.5M and EPS of $0.19.
The cable infrastructure hardware/software vendor blames delayed orders from Americas customers and "continued delays in receiving some final acceptances."
SeaChange also says it now expects FY15 (ends Jan. '15) revenue to be flat to down; the consensus is for 9% growth. The company still expects profits to grow thanks to cost cuts and stronger sales of new (higher-margin) products.
As cord-cutting slowly but steadily gains momentum, pay-TV providers are trying to strike more expansive on-demand (VOD) streaming deals to counter Netflix's (NFLX) rise.
Whereas VOD services have typically offered 4 or 5 shows on a rolling basis, providers now want to offer every episode all season.
The WSJ reports Comcast (CMCSA) has reached a broader on-demand deal with Fox (FOX, FOXA) that will include mobile viewing. Fox and (Comcast-owned) NBCUniversal are said to be more open to such deals than Disney and CBS.
VOD services provide access to shows before Netflix does, but also include ads, often disable fast-forwarding, and usually don't cover back seasons.
Netflix is telling media companies it won't pay as much for content licensed in bigger VOD deals. Content chief Ted Sarandos: "The less exploited shows are through on-demand services, the more valuable they are to us."
Rentrak estimates free VOD viewing rose over 40% in 2012. Pay-TV infrastructure vendors such as Arris (ARRS), SeaChange (SEAC - previous), and Harmonic (HLIT) benefit from rising demand.
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Anthony Dias, who has been serving as SeaChange's (SEAC +0.9%) interim CFO since May, is now the company's permanent CFO. (PR)
Dias was SeaChange's chief accounting officer before being named interim CFO. He assumed the latter position after the video infrastructure hardware/software firm's last full-time CFO, Michael Bornak, resigned to become the CFO of specialty steel manufacturer Universal Stainless.
Yesterday: SeaChange rallies following bullish SA Pro article
In an article embargoed until 10:30AM ET, Helix Investment Research argues the cable/pay-TV equipment maker's next-gen Adrenalin video delivery platform (built to handle multi-screen video transmissions/advertising) will lift growth. The author points out Adrenalin had scored 38 design wins as of March, and that three telco clients have been added since.
SeaChange's (SEAC +4.4%) new Infusion video ad platform is also viewed as a growth driver. Infusion allows customers to jointly manage TV and online ad campaigns, and to target users across both mediums.
The author also observes Helix has $3.70/share in cash/investments and no debt, and is open to returning some of those funds to shareholders.