Shares in Harmonic dropped more than 9% in morning trading Thursday after the video and broadband access tech supplier cut third quarter guidance due in part to spending reductions by customers in the U.S. and the EMEA region brought on by ongoing consoliaton.
Harmonic cut Q3 sales guidance to $81 million to $84 million, versus prior guidance of $92 million to $102 million. Wall Street was expecting $99.2 million.
"We faced a more challenging spending environment than expected in the quarter, resulting in updated financial guidance," Patrick Harshman, Harmonic's CEO, said in a statement. "Several market factors continue to hamper near-term customer investment decisions; service provider consolidation, particularly within the U.S. and EMEA regions, and the pending release of our new cable edge architecture in mid-2016 amplified the effect.”