Harmonic (HLIT) up +17% on Video Business Strength

Stephen L Kanaval  |

Harmonic Inc. (HLIT) is up +17% at the time of writing and as the trading day has progressed many analysts have raised the video infrastructure company to a “buy” rating. If you are unfamiliar with Harmonic, the company prepares and delivers broadband video to consumers through television, computers, laptops, tablets and smart phones. Its Video segment, mentioned below by the CEO, sells video and processing production and playout solutions to service providers (A video is below).

Yesterday’s earning report had these highlights:

  • EPS guidance of $0.01-0.03
  • Revenue for the quarter was at $108.8 million versus the estimate of $104.48 million.
  • Updated EPS for FY16 dropped to $0.01-0.06 EPS, plus a FY2016 revenue of $408-418 million versus the consensus $480.0 million.

On the call, CEO of HLIT Patrick Harshman did seem confident about the company’s video business and its 4Q trajectory, he said:

The first key message here is the demand momentum for Video infrastructure continued through the second quarter driven in particular by a resurgence of projects that spend traditional pay TV and live over the top services.

Intense competition between global telecom, cable and satellite direct-to-home operators, as well as over the top business trends and growing Ultra HD market momentum, all reinforce our positive outlook for sustained Video and infrastructure spending.

The second key message about our Video business is that the integration of Thomson Video Networks is going well. Customers are responding positively to our enhanced global presence, scale and strategic focus on high quality video.

Harshman also added in the call about the company’s transition into a software-centric provider and are testing a VOS™ platform for private and public clouds.

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not necessarily represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to: http://www.equities.com/disclaimer.

Watchlist

Symbol Last Price Change % Change
AAPL

     
AMZN

     
HD

     
JPM

     
IBM

     
BA

     
WMT

     
DIS

     
GOOG

     
XOM

     
BRK.A

     
FB

     
JNJ

     
WFC

     
T

     
NFLX

     
TSLA

     
V

     
UNH

     
PG