Western Show - SeaChange Shares Drop

SeaChange International shares plummeted after the maker of digital video systems announced a large profit decline for its fiscal third quarter. Maynard, Mass.-based SeaChange said it earned $4,000, or less than a penny a share, for the quarter ended Oct. 31. That compares with $292,000, or 1 cent a share, for the three months ended Sept. 30, 1999. Revenue for the quarter jumped 12%, to $24.2 million, up from $21.2 million in the prior year period. Revenue at the firm's broadcast segment jumped 47%, to $7.2 million, boosted by system shipments to international customers. Still, shares of SeaChange slid nearly 17% Wednesday, or $4.13, to $23.88.

In a statement, SeaChange president and CEO Bill Styslinger was optimistic for the company's growth opportunities.

``Four major US cable operators expect to deploy SeaChange ITV systems in the next two quarters,'' Styslinger said. ``With our initial ITV System installed at Cablevision, we have begun deployment to their 2.9 million subscriber network in metro New York. The extent of this deployment will increase sharply in the fourth quarter. In addition, we plan to install ITV systems at 5-7 divisions of Time Warner beginning in the fourth quarter. "

He added that the company expects aggressive deployments at two other major US cable operators over the next six months. Styslinger said he was comfortable with current analysts' revenue estimates for the fourth quarter of approximately $30 to $32 million and net income of approximately $0.05 per share.

Separately, SeaChange said Wednesday it has extended its VOD alliance with Liberate in two product areas. The two companies will expand their alliance in support of the Motorola DCT 5000 with Liberate TV Navigator standard, as well as their support of the Motorola DCT 2000 class of devices and network infrastructure.