Updated from July 27Scientific-Atlanta ( SFA) said fourth-quarter earnings jumped 48% from a year ago, aided by higher sales, a tax-settlement gain and market appreciation in some of the company's investments. The maker of digital transmission equipment saw a slight sequential decrease in gross margin, however, as selling prices on some products fell. The company earned $70.2 million, or 45 cents a share, in the three months to June 30, compared with earnings of $47.4 million, or 31 cents a share, last year. Revenue rose 13% to $458.8 million. The latest quarter included a gain of 10 cents a share related to a tax settlement; excluding this, analysts were expecting the company to earn 35 cents a share in the most recent quarter. Analysts surveyed by Thomson First Call expected the company to post revenue of $453.8 million. The shares rose 3% early Wednesday, adding 96 cents to $30. The company's gross margin was 36.8% in the fourth quarter of 2004, up 20 basis points from a year ago but down 10 basis points from the third quarter. "The slight sequential decline in gross margin resulted from the effects of lower selling prices and initial costs associated with overlay activities at several systems, partially offset by material cost reductions resulting from engineering redesign, procurement efforts," Scientific-Atlanta said. By category, sales of subscriber products rose 18% from a year ago to $336.8 million in the fourth quarter, while sales of transmission products rose fractionally to $122.0 million.