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Concurrent Falls on VOD Pullback

Shares in video-on- demand provider Concurrent Computer Corp. fell 49.6 percent after the company said an order for three VOD systems from a major MSO would be delayed until next quarter.

The company's stock closed at $4 per share, down $3.94 each.

Concurrent would not identify the customer, although some analysts suspected it could be Time Warner Inc. or Cox Communications Inc., two of Concurrent's largest customers.

Time Warner Cable currently uses Concurrent equipment in its systems in Tampa, Fla., and Hawaii. MSO spokesman Michael Luftman said the company has not announced any specific VOD deployments for the year and declined comment.

Cox is using Concurrent systems for VOD service in its San Diego and Phoenix markets. Officials at Cox could not be reached for comment.

Morgan Keegan Inc. analyst Murray Arenson said the delay is disappointing, but not indicative of any widespread pullback in deployment.

"You can never rule against delays and shortages on an incremental basis," Arenson said. "I don't think there is a larger industry trend at play here."

Still, the news sent other stocks in the VOD space reeling, with SeaChange International Inc. dropping 15.6 percent, or $4.38 per share, to $23.75 each. The company issued a press release shortly after the Concurrent announcement reiterating its fourth-quarter guidance.

"The timing of these new system deployments slipping in to next quarter is unfortunate, but in no way dampens Concurrent's enthusiasm for the VOD market opportunity in 2001 or the $2.5 billion dollar market potential for VOD in the U.S. cable market over the next four to five years," Concurrent president Jack Bryant said in that statement. "We remain confident that VOD will be deployed in scale in a large number of major markets in 2001."

The shipment delay forced Concurrent to restate its revenue estimates for its fiscal second quarter ending Dec. 31 to $1.7 to $1.9 million, instead of $7 million to $7.5 million.

Consolidated revenue for the period will be between $13.8 million to $14.2 million versus $18 million to $18.9 million and net losses will nearly double to between 7 cents to 8 cents per share, as opposed to 4 cents per share.

Consolidated revenue projections for 2001 remain in the $73 million to $85 million range, Concurrent said, and VOD revenue for the year should be between $32 million and $40 million.

The company said it would hold a conference call on Jan. 3 to discuss the earnings revision.