Harmonic Earnings: Here’s Why Investors Don’t Like These Results

Harmonic Inc. (NASDAQ:HLIT) had a loss and missed Wall Street’s expectations, AND came up short on beating the revenue expectation. The revenue miss is a negative sign to shareholders seeking high growth out of the company. Shares are down 4.49%.

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Harmonic Inc. Earnings Cheat Sheet

Results: Adjusted Earnings Per Share decreased to $-0.02 in the quarter versus EPS of $0.03 in the year-earlier quarter.

Revenue: Decreased 20.37% to $101.7 million from the year-earlier quarter.

Actual vs. Wall St. Expectations: Harmonic Inc. reported adjusted EPS loss of $0.02 per share. By that measure, the company missed the mean analyst estimate of $0.02. It missed the average revenue estimate of $118.29 million.

Quoting Management: “Harmonic continues to execute on our organic growth strategy and shareholder value initiatives,” said Patrick Harshman, President and Chief Executive Officer. “During the quarter, we saw year-over-year growth in orders from international customers and domestic broadcast and media customers – both verticals core to our strategic growth plan. Although demand from domestic pay TV service providers remained soft during the quarter, many domestic customers are beginning to look ahead to new video infrastructure investments in emerging CCAP, HEVC, and Ultra HD technologies. Harmonic is making good progress in our efforts to establish a market-leading position in these new technology areas, as evidenced by our recent product announcements and positive customer feedback. In addition, with a strong balance sheet and continuing prospects for positive cash flow, we announced yesterday a tender offer for up to $100 million of our common stock as part of our ongoing commitment to create shareholder value.”

Key Stats (on next page)…

Revenue decreased 23.78% from $133.43 million in the previous quarter. EPS decreased to $-0.02 in the quarter versus EPS of $0.09 in the previous quarter.

Looking Forward: Analysts have a more negative outlook for the company’s next-quarter performance. Over the past three months, the average estimate for next quarter’s earnings has fallen from a profit of $0.09 to a profit $0.06. For the current year, the average estimate has moved down from a profit of $0.37 to a profit of $0.28 over the last ninety days.

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(Company fundamentals provided by Xignite Financials. Email any earnings discrepancies to earnings [at] wallstcheatsheet.com)