Bloomberg News

RADVision Plunges as Tech Forecast Cuts Mount: Israel Overnight

October 06, 2011

Oct. 6 (Bloomberg) -- RADVision Ltd. fell in New York yesterday after cutting its third-quarter earnings forecast, the third Israeli technology company to lower its profit outlook this week as governments and companies pare spending amid mounting concern about a global economic slowdown.

RADVision, based in Tel Aviv, fell 4.8 percent to $5.31 on the Nasdaq Stock Market after trimming its revenue forecast 11 percent. The shares rebounded 3.8 percent to 19.42 shekels, or the equivalent of $5.23, at the 4:30 p.m. close in Tel Aviv today, after tumbling 9.6 percent yesterday. Radware Ltd. and AudioCodes Ltd. also cut guidance this week, citing the economic slump. Israel’s benchmark TA-25 Index rose 1.1 percent.

RADVision, the maker of video-conferencing systems, said it expects revenue of $17 million to $17.5 million, below the previous forecast of $19 million, due to “challenging economic conditions” and stronger competition. AudioCodes, whose technology enables Internet phone calls, sank 27 percent on Oct. 3 after lowering its sales forecast to as little as $155 million this year from $174 million because of “lower-than-anticipated technology, government and residential business.”

“When there’s a macro-related pullback in enterprise spending, often times that will impact the smallest guys first and more severely,” said Andrew Uerkwitz, an analyst at Oppenheimer & Co. in New York, who covers Israeli technology companies. “It’s going to be tough for them because they’re competing with the bigger players.”

The Bloomberg Consumer Comfort Index fell to the second- lowest level on record in the week ended Sept. 25 on concern that growth will abate in the wake of Europe’s debt crisis. Federal Reserve Chairman Ben S. Bernanke said Oct. 4 that the recovery will be “somewhat slower” in coming quarters.

The Bloomberg Israel-US 25 Index of the largest New York- traded Israeli companies rose 3.2 percent yesterday, led by ClickSoftware Technologies Ltd.

Slower Progress

RADVision said yesterday it will report a loss of as much as 34 cents a share in the third quarter, after previously predicting a net loss of 27 cents.

“Our progress was slower than expected in the third quarter amidst challenging economic conditions and an intensely competitive environment,” Chief Executive Officer Boaz Raviv said in a statement.

AudioCodes, which counts Alcatel-Lucent SA among its customers, said Oct. 3 that this year’s profit will be lower than the 44 cents to 48 cents per share previously forecast, without giving a specific estimate.

Radware, the Israeli maker of technology that helps Internet networks run more efficiently, lowered the higher range of its third-quarter sales forecast to $42.2 million from $43 million on Oct. 4. Radware and RADVision were co-founded by brothers Yehuda and Zohar Zisapel’s RAD group.

Radware shares gained 4.5 percent to $20.70 on Oct. 4 as the company announced plans to repurchase up to $20 million of its stock.

Stocks, Shekel

The shekel gained for a third day, climbing 0.3 percent to 3.7109 per dollar. The currency has dropped 3.3 percent in the past 12 months, the best performer among 10 emerging markets in Europe, the Middle East and Africa tracked by Bloomberg.

Israel, whose population of 7.7 million is similar to Switzerland’s, has about 60 companies traded on the Nasdaq stock market, the most of any country outside north America after China. It is also home to the largest number of startup companies per capita in the world.

Israel posted inward foreign net direct investment via domestic banks of $550 million in August, mainly in the technology and shipping industries, the Bank of Israel said in an e-mailed statement yesterday.

SodaStream, Teva

ClickSoftware, which counts EON AG and PG&E Corp. as customers for software that helps track orders, increased 5.3 percent to $9.01, the highest level since Aug. 15.

SodaStream International Ltd., the Israeli maker of homemade soda machines, climbed 3.4 percent to $32.83. The company said yesterday that it bought CEM Industries SRL, an Italian maker of products for the beverage industry.

Teva Pharmaceutical Industries Ltd., the world’s largest maker of generic drugs, climbed 4.9 percent to 139.80 shekels, or the equivalent of $37.67. The U.S. shares rose the most in almost two months yesterday, increasing 3.8 percent to $37.21. The New York shares’ $1.37-premium yesterday was the biggest among the largest Israeli companies traded in the U.S.

Alvarion Ltd. lost 2.8 percent to 3.812 shekels, or the equivalent of $1.03. The U.S. shares increased 7.1 percent to $1.06. The maker of wireless telecommunications equipment received a $2 million contract with Angola Communications Systems to install a high-speed wireless broadband network in the African nation.

--With assistance from Gwen Ackerman in Jerusalem. Editors: Brendan Walsh, Marie-France Han

To contact the reporter on this story: Tal Barak Harif in New York at tbarak@bloomberg.net

To contact the editor responsible for this story: David Papadopoulos at papadopoulos@bloomberg.net


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