Scientific-Atlanta said Thursday its first-quarter profit will fall well short of analysts' expectations, making the communications equipment company the latest victim of overseas economic weakness.
Scientific-Atlanta (SFA), which makes equipment for telecommunications and broadcasting companies, said it expects its first quarter revenues to be US$257 million, compared with the previous year's first quarter sales of $295 million. As a result of weak sales, the company expects first-quarter income of between 2 and 5 cents a share.
Wall Street analysts had expected income of 22 cents a share, according to Zacks Investment Research.
Scientific-Atlanta shares plummeted $8.44, or 41 percent, to $11.94 in late morning trading. Earlier, the shares traded as low as $11.75.
The Norcross, Georgia, company blamed weak overseas sales for its earnings shortfall. Compared with last year's first quarter, the firm's international revenues were down $62 million, or 54 percent, including a $38 million decline in revenues from Asia. In particular, sales of the company's satellite and transmission products suffered during the quarter, Scientific-Atlanta said.
According to a statement released Thursday, the company's satellite products unit was hurt by delays in shipments of PowerVu digital compression systems to India, the loss or delay of some orders from Eastern Europe and Asia, and by general slowness in the overseas cable TV-related satellite business. Transmission products suffered from delayed shipment to Latin America and Europe.
The company also said sales of new digital set-top boxes, which will give TVs PC-like capabilities, increased in the quarter, but not enough to offset the drop in sales of older, analog set-top devices.
