SeaChange: We Maintain 'Strong Relationship' With Comcast
SeaChange International said it "continues to maintain a strong relationship with Comcast" and that it is working with the cable operator on elements of its next-generation network, as part of the vendor announcing second-quarter 2011 results.
Overall, Comcast and the U.K.'s Virgin Media were the two customers that represented at least 10% of SeaChange's revenue for the quarter ended July 31, 2011.
SeaChange had quarterly revenue of $50.1 million, down 2.9% from $51.6 million in the year-earlier period. Net income for the second quarter was $0.8 million (2 cents per share), a 77% decline from $3.5 million (11 cents per share) a year ago. That missed Wall Street consensus estimates of $55.7 million in sales and 16 cents per share on an adjusted basis; SeaChange said net income for the year-ago quarter included a one-time $3.3 million income tax benefit.
Comcast had removed SeaChange's VOD servers from its production environment, as reported last month by Multichannel News. According to SeaChange, that change happened in early 2010, at the same time the vendor was selected to be the sole VOD back-office software provider.
SeaChange said it currently provides software to Comcast including: the back-office publishing gateway for its set-top boxes; set-top VOD enablement software; next-generation home gateway software; linear advertising software; and VOD advertising play-listing software.
SeaChange also confirmed that it is working with Charter to "test next-generation home gateway software," as reported by Multichannel News last week.
In addition, the vendor said it "continues to roll out AT&T's advertising platform," a reference to the telco's local ad-insertion initiative.
For its fiscal second quarter of 2012, SeaChange's software segment revenue was $34.6 million, up 10% year over year, attributable to increased shipments of advertising-insertion software to North American service providers and increased VOD software revenue from eventIS.
The company's Servers and Storage segment generated quarterly revenue of $7.7 million, a decline of 41%. SeaChange said the drop was due primarily to lower VOD server shipments to North American and European customers.
"SeaChange continues to bring major new customers on board and serve its longstanding customers with an increasingly diversified, new generation of software," SeaChange CEO and chairman Bill Styslinger said in announcing the earnings. "We were prepared well in advance to be one of the first software and services providers to lead the multiscreen video opportunity, as we had done in VOD and advertising, and we'll continue to show how this software solution is progressing from quarter to quarter."
Styslinger added that SeaChange was "disappointed by unforecasted delays in recognizing revenue in the second quarter from the newer products we're installing for two of our longstanding large customers," but he did not identify those customers.
SeaChange forecast third quarter 2012 revenue of $51 million to $57 million and non-GAAP earnings 16 cents to 22 cents per share.
Arris was in discussions with SeaChange about an acquisition, according to the Wall Street Journal.
SeaChange, in its second-quarter earnings announcement, noted that as previously announced its board formed an independent advisory committee to evaluate a range of business developments and initiatives with financial advisors Blackstone Advisory Partners and Evercore Group. SeaChange said the committee is "continuing to evaluate a range of strategic options for the Company. The committee's work is in the later stages and we expect to report back the status of these efforts to shareholders in the near future."
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