Rock On: DVR Boxes Drive S-A's 2Q Earnings, Cox Steps Up S-A Orders

S-A [SFA] beat Wall St expectations Wed, reporting strong set-top sales for 2Q, particularly for the Explorer 8000. It shipped 260K of the DVR boxes, a sequential increase of 47%, with the boxes available to 75% of basic subs in S-A’s footprint. S-A’s customer base also is growing with Cox [COX] for the 1st time, joining a list of MSOs that each account for 10% or more of S-A’s business (Cox, Time Warner, Cablevision [CVC] and Comcast [CMCSA] combined account for more than 50% of S-A’s business). Further evidence of Cox’s increased involvement can be seen in its decision to switch out all its Motorola [MOT] boxes in Tuscon, AZ, to S-A (a process that began Jan 6) and the MSO’s successful evaluation of the "Prisma IP Transport Network," now deployed in 7 Cox markets. S- A’s net profit climbed to $51.1mln in 2Q, or 33 cents a share, from $15.1mln, or 10 cents a share, a year ago. Thomson First Call had projected income of 29 cents/share. HD also performed well, with more than 10K Explorer 8K HD boxes shipped and 101K HD set-tops shipped (+69%). HD products, 8000s and DOCSIS 4000s accounted for more than 50% of the total boxes shipped.