Friedman Billings keeps its underperform rating on SeaChange (SEAC).
The maker of storage servers for videos posted 12 cents second-quarter earnings per share, and sees 12 cents third-quarter earnings per share. Analyst Alan Bezoza says second-quarter results showed slight upside to his estimates. However, he says he remains concerned about a slowdown from SeaChange's largest customer, Comcast, over the next six months as initial high-capacity video-on-demand deployments wind down.
Given SeaChange's flat overall guidance for the third quarter, he expects video-on-demand revs to be soft for the next several quarters until new opportunities (capacity additions, telcos, and international cable operators) bear fruit later in 2005. Bezoza says the roughly $20 million in quarterly video-on-demand revenues from Comcast won't likely be offset in the near term. He maintains the $11 price target.