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Investing.com -- Harmonic Inc . (NASDAQ:HLIT) reported better-than-expected second quarter earnings on Monday, but its shares tumbled 15.7% after the company issued third-quarter guidance that fell significantly below analyst expectations.
The broadband and video technology provider posted adjusted earnings of $0.09 per share for the second quarter, substantially beating the analyst estimate of $0.02. Revenue came in at $138 million, surpassing the consensus estimate of $127.73 million and showing only a slight decline from $138.7 million in the same quarter last year.
However, investors were clearly disappointed by Harmonic’s weak outlook. The company projected third-quarter revenue of $120-$135 million, far below analyst expectations of $167.2 million. Its earnings guidance of -$0.04 to $0.00 per share also missed the consensus estimate of $0.16 per share by a wide margin.
"Our team delivered strong second quarter results with revenue and profitability in both our Video and Broadband businesses exceeding the high end of our guidance," said Nimrod Ben-Natan, president and CEO of Harmonic. "While we expect Broadband upgrade activity to persist at a moderate pace in 2025, we are beginning to see positive indicators... which we expect will turn into tailwinds for us in 2026."
The company’s Video segment showed growth with revenue increasing to $51.1 million from $45.8 million YoY, while Broadband segment revenue declined to $86.9 million from $92.9 million YoY. Harmonic reported record Video SaaS revenue of $15.4 million in the second quarter, reflecting continued growth in sports streaming.
Harmonic’s cash position strengthened significantly to $123.9 million, compared to $45.9 million in the prior year period. During the quarter, the company repurchased approximately 1.6 million shares of common stock for $14.0 million.
Despite the positive second quarter performance, the market’s reaction suggests investors are more concerned about the company’s near-term outlook than its recent results.
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