Updated from 11 a.m. EDT Scientific-Atlanta ( SFA), manufacturer of set-top boxes and other cable TV equipment, is at the center of a Wall Street shouting match. On Wednesday, two sell-side analysts issued positive reports on S-A, with one of them saying he was 90% certain S-A had won a major new cable TV industry customer. (That view was borne out by events Thursday afternoon.) Meanwhile, a bear on the stock says that despite the company's indisputable strengths, customer concentration and other issues foreshadow ugly surprises. The difference of opinion illustrates how turbulence in the cable TV market is spreading beyond the local system operators at its core to industry suppliers. S-A's shares, boosted by positive comments Thursday morning from Morgan Stanley, rose 29 cents to $14.51, leaving them 54% below their 52-week high.
Cablevision, which earlier this month had told analysts it would be adding unnamed suppliers to supplement Sony, Thursday afternoon confirmed it had set a deal with Scientific-Atlanta, boosting the stock mildly in a mixed day for the market. Separately, Deutsche Bank analyst Peter Ausnit slightly raised his high-end estimates on S-A Wednesday, citing factors including the new deal with Adelphia and expected stabilization in average selling prices on the company's advanced set-top boxes. Ausnit has a strong buy on S-A; his firm is an S-A shareholder and has done recent investment banking for the company.