Gilat Satellite Networks Ltd. (GILT:US) headed for the highest level in more than two years in Tel Aviv on prospects new contracts will spur the Israeli company to post the highest profit in three years.
The satellite technology developer rallied 3.9 percent to 21.53 shekels, or the equivalent of $5.83, at 9:58 a.m. in Tel Aviv, headed for the highest level since Oct. 2010 and bringing the two-day gain to 6 percent. The company’s U.S.-traded shares advanced 8.5 percent to $5.88 yesterday. Israel-based Gilat led gains on the Bloomberg Israel-US Equity Index of the largest Israeli companies traded in New York, driving the gauge to a nine-month high.
Gilat said yesterday that it won a five-year contract valued at $20 million to supply satellite networks to an unidentified service provider. The order is at least the seventh the company has received over the past three months, according to the company’s website. Gilat may post earnings (GILT:US) of 24 cents per share in 2013, the most since 2010, according to the mean of two analysts’ estimates compiled by Bloomberg.
“They’ve been doing really well, and they’ve been getting a lot of contracts lately,” Bruce Roberts, an analyst at National Securities Corp. who rates Gilat buy, said by phone yesterday from New York. The company’s management has “been very effective and has definitely been focusing on cost cutting and improving the sales,” he said.
The Bloomberg Israel-U.S. gauge added 0.4 percent to 88.79, the highest level since May 3. Israel’s benchmark TA-25 Index rose 0.1 percent to 1,230.43 in Tel Aviv today.
Gilat may report that sales rose 1.4 percent to $344 million in 2012 and will post 2013 revenue of $356.5 million, according to the mean of two analyst estimates compiled by Bloomberg. The developer is scheduled to report 2012 and fourth- quarter earnings today.
The company’s share price more than doubled in the six months through yesterday, making it the third-best performer among 132 companies on the Nasdaq Telecommunications Index in the last six months. Israeli technology developers AudioCodes Ltd. and B.O.S. Better On-line Solutions Ltd. had the biggest gains.
Gilat said on Feb. 7 that it was selected by India’s Nelco Ltd. and Bharti Airtel Ltd. to provide secured satellite-based communications as the main mode of connectivity for as many as 30,000 automated teller machines in India. The company won a contract by Honeywell International Inc., a maker of flight controls and thermostats, on Jan. 29.
Erez Antebi, who became Gilat’s chief executive officer in January 2012, has worked to boost sales and control costs, improving investor sentiment, Roberts said. Antebi previously led Gilat’s entry into the the market for higher-frequency satellite technology, known as ka-band.
“There’s a lot more satellites that are going up in space that use ka-band, and that’s going to be a big driver for them,” Roberts said.
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