Nov. 2 (Bloomberg) -- Allot Communications Ltd. climbed to the highest in three months in Tel Aviv, closing the gap with U.S.-traded shares, after Israel’s biggest maker of high-speed networking equipment reported profit that beat forecasts.
The shares gained 5.6 percent to 52.90 shekels, the equivalent of $14.47, at 12:07 p.m. in Tel Aviv, the highest intraday level since Aug. 1. The New York-traded shares surged 8.1 percent yesterday to close at $14.45. The U.S. shares gained 24 percent this year, compared with an 18 percent drop in the Bloomberg Israel-US 25 Index.
“Even though macro conditions are weak, people are not dropping off in terms of usage of cell phones or tablets,” said Jay Srivatsa, an analyst at Chardan Capital Markets LLC. “All that adds to the increase in bandwidth which means you need network optimization.”
The company announced plans to sell $9.5 million of equipment to an Asian fixed-line operator on Oct. 25. Revenue from the order will likely be recognized over several quarters, Nachum Falek, Allot’s chief financial officer, said on a conference call with analysts. Sales increased 37 percent to $20.1 million in the third quarter as five service providers made orders from the company for the first time, the company said in a statement.
Third-quarter profit more than doubled to $2.1 million, or 8 cents a share. Earnings excluding certain items were 13 cents a share, exceeding the average estimate of 10 cents among eight analysts surveyed by Bloomberg. Adjusted earnings were 6 cents a share a year earlier.
“We’re not seeing any slowdown in European markets and we see a number of opportunities in the U.S. and Asia-Pacific for 2012,” Chief Executive Officer Rami Hadar said on the conference call.
The shekel gained for the first time in three days, rising 0.3 percent to 3.6505 a dollar. The TA-25 Index, Israel’s benchmark stock index, fell for a fourth day, retreating 0.3 percent.
The Israel-US 25 Index of the largest Israeli companies traded in New York fell 3.7 percent yesterday, led by Internet Gold-Golden Lines Ltd. and Tower Semiconductor Ltd., on concern Europe’s plan to bail out Greece will unravel. The Standard & Poor’s 500 Index lost the most in a month, dropping 2.8 percent.
“The whole world is following Europe in sympathy to what is going on in Greece,” said Gadi Beer, who manages the Amidex35 Israel Mutual Fund. “Israeli companies don’t serve only Israelis. These are basically international companies.”
--Editors: Claudia Maedler, Peter Branton
To contact the reporters on this story: Zachary Tracer in New York at firstname.lastname@example.org; Susan Lerner in Jerusalem at email@example.com
To contact the editor responsible for this story: Claudia Maedler at firstname.lastname@example.org