Scientific-Atlanta reported quarterly sales of $495.2 million. Net income $53.4 million, or $0.34 per share, compared with $58.7 million, or $0.38 per share, in the same period last year. Gross margin in the second quarter was 36.1 percent of sales, down one percentage point from last year. Some highlights:
- There was a year-to-year increase in sales of subscriber products driven by higher volumes of Explorer digital set-tops and WebSTAR cable modems and a continued mix shift toward higher-end set-top and modem products.
- The company hopes to close its merger with Cisco this quarter.
Selling prices for almost all set-top models continued to decline in the quarter.
The company sold 1.152 million set-tops during the quarter. Sales of transmission products were $122.4 million, up 7%from last year but down 5% sequentially.
Digital video recorder (DVR) shipments set a new record of 556,000 units this quarter, increasing 24% from last year’s second quarter and 20% sequentially. Two hundred sixty thousand digital video recorders, or a little under half of the total, were high-definition units. Shipments of all high-definition set-tops, including DVR and non-DVR models, were 386 thousand units, an increase of 27% from last year and 7% sequentially.
Scientific-Atlanta sold a record 981 thousand modems, an increase of 113 percent from last year and an increase of two percent sequentially. Forty percent of unit shipments, or 391 thousand, were voice modems. Voice modem shipments increased by 234 percent from last year but declined eight percent sequentially. The sequential decline was related to a product issue that was resolved during the quarter just ended. More than two-thirds of the voice modems were shipped to customers outside the United States.
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