Question-and-Answer Session
Operator
(Operator Instructions) Your first question comes from Mark Sue – RBC Capital Markets.
Mark Sue – RBC Capital Markets
The guidance of $72 million to $78 million how should we look at the Scopus contribution in 2Q? Furthermore any thoughts on how we should look at the trends by customer segment in 2Q, telco, cable and satellite?
Patrick J. Harshman
Mark, we’ve made a couple of comments here that I think are relevant. One is, by customer segment we noted that cable has been relatively strong. Now, we’ve seen pricing pressure and some reduced spending in cable but in large that market has actually been a relative bright point. In contrast I’d say the step down in other customer segments, satellite, broadcast and IPTV has been a little bit more significant.
I would also comment that the customer spending impact that we’ve seen has been somewhat more pronounced overseas particularly in Western and Eastern Europe I think as Robin mentioned. In general therefore, we’ve seen the Scopus business impact somewhat more heavily than parts of the core Harmonic business particularly those parts that are focused on cable.
We won’t be breaking out Scopus revenue and Harmonic revenue going forward but our Q2 guidance takes all those considerations into account as well as the actual bookings that we saw in Q4 and Q1 which particularly in terms of digital video projects is really rolling forward into constituting the backlog that we have for Q2 revenue.
Mark Sue – RBC Capital Markets
That being said, will international be up sequentially? Are you seeing some early trends in terms of bookings for stabilization overall internationally for the second quarter?
Patrick J. Harshman
I don’t expect international to be up sequentially. I think we saw some good strength carrying over from bookings last year. However as we noted I think as a whole international bookings were relatively more challenged than domestic bookings in the past quarter and therefore I think you’ll see the manifestation of that in the second quarter revenue.
Mark Sue – RBC Capital Markets
Robin, just quickly, pricing pressure, I guess it’s on the cable side, is that something that will stabilize? Separately, tax rate for next year.
Robin N. Dickson
On pricing pressure is certainly referring to some things we’ve seen most of which relates to the cable sector. As to when it moderates, I think to some extent that’s a function of where the economy goes from here and I would expect we’ll see some continuation of it.
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