Broadband solutions company C-COR (NASDAQ:CCBL) reported decidedly low-band results this morning. Sales for the December quarter were down about 5% from last year, and the company posted a loss of $0.04 per share (versus $0.18 in earnings, after adjusting for one-time gains).

This makes two straight quarter-by-quarter declines in revenue and two consecutive quarters in which the company pre-warned that results weren't going to meet estimates. As a result, estimates for the fiscal year ending June 2005 have dropped from $0.42 to $0.21 over the past three months. More worrying still, the company reported a quarter-end backlog of $31 million -- pretty meager compared with the $58.5 million in sales reported for the quarter.

Is there cause for hope here? Surprisingly, yes. Because of a yearlong acquisition binge when management acquired five companies, C-COR now has footholds in some very appealing markets. Digital video, voice over Internet protocol, video on demand, and HDTV are all major growth opportunities, and the company is well-positioned to supply equipment, software, and support to cable providers that want to expand into these higher-margin services.

Given the current unsteady state of the business, valuation is tricky. The trailing price-to-earnings ratio of 55 looks ugly, but the shares trade at only 1.6 times the book value -- not bad versus larger competitors such as Arris Group (NASDAQ:ARRS) or Scientific Atlanta (NYSE:SFA).

The cable TV world is certainly undergoing change as cable providers like Time Warner (NYSE:TWX) and Comcast (NASDAQ:CMCSA) have turned from subscriber growth to tacking on pricey new features such as video on demand, digital telephony, and HDTV in an effort to boost their revenues and profits. Those services don't happen by magic, though, and if consumers want those add-ons, the cable providers will have to buy new gear.

C-COR is certainly positioned to take advantage of this new build-out cycle, but good prospects don't make shareholders wealthy -- that takes earnings and free cash flow. Fools who want to take a high-risk flier on a tech turnaround may want to take a look, but more cautious investors might just want to watch this one on cable TV.

Fool contributor Stephen Simpson is a chartered financial analyst and has no ownership interest in any stocks mentioned.