Despite posting a sharp drop in quarterly earnings compared with a year ago, Scientific-Atlanta's 26-cent-a-share profit for the December quarter beat Wall Street's expectations. In the same period last year, S-A's profit was 42 cents a share.

At $418.2 million, sales were up slightly compared with the September quarter, but down 34% from the $631.4 million the company posted last year.

S-A shipped 865,000 Explorer set-top boxes during the quarter, compared with just 267,000 shipped in the same period last year. In its fiscal first quarter ending in September, S-A shipped 855,000 set-tops.

The better-than-expected results and the company's gross margin improvements pleased Wall Street. Near the close of trading Friday, S-A traded at $26.62, up $2.82, or about 12%.

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