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Why Harmonic Stock Soared on Tuesday

By Daniel Sparks – Aug 4, 2020 at 1:53PM

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The tech company's outlook for the rest of the year is impressive.

What happened

Shares of Harmonic (HLIT 2.24%), a telecommunications infrastructure specialist, soared on Tuesday. The tech stock was up about 27% as of 12:25 p.m. EDT.

The stock's gain followed the company's better-than-expected second-quarter report and management's strong guidance for the rest of the year.

A chart showing a stock price rising

Image source: Getty Images.

So what

Harmonic's second-quarter revenue of $74 million was down 12.8% year over year. But it was more than $4 million higher than analysts were expecting. The company's non-GAAP (adjusted) loss per share of $0.06 was narrower than the $0.13 loss analysts were expecting.

"Harmonic executed well, exceeding expectations despite challenging market conditions," said Harmonic CEO Patrick Harshman in the earnings release.

Importantly, the company saw growth in both its cable access and software-as-a-service revenue. In addition, its video software-as-a-service customer base rose 136% year over year to 66 customers.

Now what

Looking ahead, Harmonic aims to build on this momentum. Management says it expects to be profitable during the second half of 2020. Furthermore, Harmonic guided for full-year revenue between $349.5 million and $381.5 million. Analysts, on average, were expecting 2020 revenue of $339.4 million. 

Daniel Sparks has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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