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Scientific-Atlanta Misses on Sales

The second quarter brings a second straight top-line shortfall.
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Scientific-Atlanta (SFA) hit second-quarter earnings targets but missed sales targets for the second time in a row.

The Atlanta-based maker of cable set-top boxes made $53 million, or 34 cents a share, down from the year-ago $59 million, or 38 cents a share. Excluding certain costs, pro forma earnings rose to 44 cents a share from 38 cents a year ago, beating the Thomson First Call analyst consensus estimate by a penny.

Revenue rose to $495 million from $441 million a year earlier. Analysts had been looking for sales of $511 million.

Latest-quarter pro forma numbers exclude $6.6 million of pretax expenses related to the pending acquisition by

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, which agreed in November to buy Scientific-Atlanta. The company also took a pretax writedown of $3.6 million related to an equity investment and $9.8 million of pretax stock option expense.

Second quarter bookings were $549.4 million, up 16% from a year ago and 20% sequentially. Subscriber product bookings rose 21% from a year ago and up 34% sequentially. Bookings of transmission products rose slightly from last year but dropped 13% sequentially.

Gross margin in the second quarter was 36.1% of sales, down 1 percentage point from last year. This decline was related primarily to less favorable product mix, expenses related to a cable modem product issue that was resolved during the quarter just ended and the expensing of stock options.