Sept. 15 (Bloomberg) -- Allot Communications Ltd., the biggest gainer among Israeli companies traded in the U.S. over the past year, is weathering a global economic slump as soaring sales of iPhones and iPads boost demand for the company’s data traffic equipment, Chief Executive Officer Rami Hadar said.
“As long as people continue to innovate with applications and devices like iPhones and iPads then Allot should be OK,” Hadar said in a phone interview from the company’s headquarters in Hod Hasharon, Israel. “So far so good. We’re not feeling any slowdown in our business.”
Shares of Israel’s largest maker of high-speed networking equipment climbed 5.9 percent to $12.21 on the Nasdaq Stock Market yesterday, increasing the 12-month gain to 126 percent, the biggest on the Bloomberg Israel-US 25 Index of the largest Israeli companies traded in New York. The gauge advanced 1.7 percent to 82.44, led by Mellanox Technologies Ltd., the 12- year-old Israeli adapter maker part-owned by Oracle Corp.
Soaring Internet traffic and increased online video streaming are driving demand for wireless-networking equipment that can process the data. Apple Inc. said iPhone sales rose 142 percent from a year earlier in the quarter ended June 25, while the number of iPads sold climbed 183 percent. Allot sales rose to a record $18.5 million in the second quarter from $13.6 million a year earlier, a 13th consecutive quarterly increase.
“The mobile market is the biggest growth engine for us,” Hadar said. “We’re enjoying the phenomenal growth of applications and new devices, which is really driving the need for our equipment.”
Hadar, 48, previously headed Native Networks, an Israeli maker of ethernet networking technology that was sold in 2005 for $55 million in cash to France’s largest supplier of telecommunications equipment, known today as Alcatel-Lucent SA.
Israel, whose population of 7.7 million is similar to Switzerland’s, has 57 companies traded on the Nasdaq, the most of any country outside the U.S. after China. It is also home to the largest number of startup companies per capita in the world.
Allot, whose customers include U.K.’s second-largest pay- television company Virgin Media Inc. and billionaire Carlos Slim’s fixed-line carrier, Telefonos de Mexico SAB, developed a technology that allows internet providers to differentiate network traffic and provide tailored plans to their clients as demand for faster data soars.
U.S. Internet users engaged in a record 6.9 billion online video viewing sessions in July, according to Reston, Virginia- based industry researcher ComScore. About 86 percent of U.S. Web users viewed online video that month, ComScore’s data show.
Allot shares have outperformed competitors, including Fremont, California-based Procera Networks Inc.’s 54 percent gain over the past 12 months and Waterloo, Ontario-based Sandvine Corp.’s 7 percent retreat.
The company’s stock gain has pushed valuations to 23.8 times 2012 estimated earnings, more than double the Nasdaq Composite Index’s 11.3 level and 7.9 for the Bloomberg Israel-US 25 Index.
Shares of Allot have dropped 36 percent in New York since reaching a record level of $19.05 on July 19, as concern the global economy is slipping back into a recession amid a worsening European-debt crisis triggered a 19 percent plunge in the Nasdaq Composite Index from April 29 to Aug. 19.
The company’s Aug. 1 announcement of a secondary offering also pushed shares lower. Allot has postponed the plans to sell stock since then because of the drop in global equities.
“We decided to pull back given the negative market conditions,” Hadar said. “We’ll see when and where it would make sense to come back.”
Allot, which listed shares on the Tel Aviv Stock Exchange on Dec. 22, rose 5.5 percent to 45.70 shekels, or the equivalent of $12.45, as of the 4:30 p.m. close in Tel Aviv today.
Israel’s benchmark TA-25 Index increased for a third day, jumping 2 percent to 1,056.83, trimming the decline for the week to 0.6 percent. The Israeli stock market was upgraded to developed market status by MSCI Inc. in May 2010, the same month the 63-year-old country was accepted to the Organization for Economic Cooperation and Development.
The shekel strengthened 1 percent to 3.6719 per U.S. dollar, paring the decline over the past month to 3.8 percent.
Israel posted its first quarterly current-account deficit since 2008 in the second quarter as export growth eased amid an economic slowdown in the country’s main export markets. The seasonally adjusted deficit was $560 million, compared with a revised surplus of $362 million in the previous three months, the Central Bureau of Statistics said yesterday.
Israeli technology companies raised $569 million in capital during the second quarter of 2011, the most in two years and up from $343 million in the same period last year, according to the Israel Venture Capital-KPMG Quarterly Survey released July 13.
Mellanox jumped 6.2 percent to $35.12 yesterday, the highest level since the company listed shares on the Nasdaq on February 2007. The Tel Aviv shares advanced 7.1 percent to 133 shekels, or the equivalent of $36.22 today. The $1.65 premium for the New York shares yesterday was the biggest for the largest Israeli companies traded in the U.S.
Magal Security Systems Ltd. declined to the lowest level since December 1999, dropping 5.2 percent to $2.20. The Tel Aviv shares, which sank 11 percent yesterday, climbed 7 percent to 8.196 shekels, or the equivalent of $2.23, today. The maker of computerized security systems will delist from the Tel Aviv Stock Exchange on Dec. 1.
--Editors: Marie-France Han, Brendan Walsh
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