Slow sales weigh heavily on digital TV company

The glacial pace of the digital TV revolution has hit Hauppauge Digital, which today reported a steep drop in profits.

Hauppauge, a maker of receivers and other parts for receiving digital TV broadcasts, said slower sales sharply reduced its overall profits. The company reported that second-quarter earnings dropped 70 percent from a year ago to $257,464, or 3 cents per share, on sales of $19.53 million. In last year's second quarter, the company earned $865,552, or 9 cents per share, on sales of $14.51 million.

"Though our sales growth in the quarter was satisfactory, the company had lower overall profit margins due to the slow acceptance of our digital TV receivers in the United States," Ken Plotkin, Hauppauge's chief executive, said in a statement. "Though Hauppauge is a firm believer in the potential of the digital TV market, in both the data broadcast area and for viewing digital TV shows, this market has been ramping up slower than expected."

Hauppauge also cited the fall of the euro, noting that a large portion of its sales are made in the European currency.

Hauppauge had earlier warned analysts that second quarter sales could be as low as $200,000 or 2 cents per share because of softness in the digital TV market

Digital TV sales in March reached a record 24,332 units, according to the Consumer Electronics Association. The trade group said that about 200,000 units have been sold since products began shipping in August 1998.