Bloomberg News

Mellanox Drops on Tech Concerns Ahead of Results: Tel Aviv Mover

July 18, 2012

Mellanox Technologies Ltd. (MLNX:US), an Israeli developer of technology used to transfer and store data, dropped to the lowest in more than a month after its U.S.-traded shares tumbled and ahead of quarterly results today.

The shares declined 4 percent to 253.5 shekels, or the equivalent of $63.25, the lowest since June 14, at the 4:30 p.m. close in Tel Aviv. The New York-traded stock dropped 5.5 percent to $62.24 yesterday.

“Mellanox serves areas such as cloud computing which are recording strong growth and we expect strong results today,” Jonathan Kreizman, an analyst at Clal Finance Batucha Brokerage Ltd. said by phone today. “The recent weak performance of the shares reflects weakness in the technology sector overall and concern about earnings tonight versus analyst expectations.”

Mellanox has fallen 14 percent in Tel Aviv since July 10, when Advanced Micro Devices Inc. (AMD:US), the number-two maker of processors for personal computers, reported a drop in second- quarter sales, generating concerns technology companies will report slower growth. Intel Corp., the world’s largest semiconductor maker, scaled back its annual sales forecast today as personal-computer demand fails to rebound among consumers in the U.S. and Europe. Intel is estimated to account for 2 percent of Mellanox’s 2012 sales, according to data (MLNX:US) compiled by Bloomberg.

The cloud market, where companies can pay pennies an hour to have their websites and applications hosted rather than buying and managing their own servers, is expected to climb to $10.5 billion in 2014 from $3.7 billion last year, according to Gartner Inc.

Mellanox will probably say second-quarter sales doubled to $128 million when it announces its results later today, according to the median estimate (MLNX:US) of 12 analysts surveyed by Bloomberg. Net income is expected to rise to $24.5 million, according to the mean forecast of four analysts on Bloomberg.

To contact the reporter on this story: Shoshanna Solomon in Tel Aviv at ssolomon22@bloomberg.net

To contact the editor responsible for this story: Claudia Maedler at cmaedler@bloomberg.net


Toyota's Hydrogen Man
LIMITED-TIME OFFER SUBSCRIBE NOW

Companies Mentioned

  • MLNX
    (Mellanox Technologies Ltd)
    • $44.06 USD
    • 0.62
    • 1.41%
  • AMD
    (Advanced Micro Devices Inc)
    • $2.57 USD
    • 0.02
    • 0.78%
Market data is delayed at least 15 minutes.
 
blog comments powered by Disqus