Bloomberg News

Radware Rises as U.S. Seeks Cybersecurity Bids: Israel Overnight

July 24, 2013

Radware Ltd. (RDWR:US) rose to a nine-week high in New York on speculation the Israeli technology maker will benefit from increased spending to bolster defenses against computer hackers.

The shares advanced for a fifth day, climbing 0.7 percent to $15.19. Partner Communications Company Ltd., the second largest Israeli mobile-phone provider, declined the most on the Bloomberg Israel-US Equity Index, which dropped 0.8 percent. Gazit-Globe Ltd. (GZT) closed at a 1 percent premium to the Tel Aviv shares, the biggest among dual-listed companies.

Lockheed Martin Corp. (LMT:US), SAIC Inc. (SAI:US) and Northrop Grumman Corp. (NOC:US) are among contractors competing for as much as $6 billion in contracts that the U.S. Department of Homeland Security plans to award as early as this month for an unclassified program to protect federal, state and local agencies’ computer networks. Radware is joining with larger companies to take part in the bids, Howard Teicher, a vice president for the public sector for Radware, said in an interview July 18.

“The company’s got some interesting technology that is gaining share in the U.S.,” Alex Henderson, an analyst at Needham & Co. in New York who rates Radware hold, said by phone yesterday. “It would make sense for Radware to be partnering with some of these players.”

The program follows an executive order from President Barack Obama made in February, which directed the DHS to ensure that unclassified government networks are scanned for threats and defended from attacks. As many as five companies will be given contracts by the General Services Administration, according to a request for bids.

Income Outlook

“We look forward to DHS making their decision for this next-gen cybersecurity for the government,” Brian Gallagher, Radware’s director of public relations, said in an interview yesterday.

The Tel Aviv-based company is forecast (RDWR:US) to report a 26 percent drop in net income when it releases second-quarter earnings tomorrow, according to the average estimate of four analysts surveyed by Bloomberg. Sales were probably little changed at $47 million, according to seven estimates.

Profit fell 35 percent in the first quarter to $4.49 million, trailing analysts’ estimates for $5.31 million, as sales in the European, Middle East and Africa region slowed. The company received 30 percent of its revenue (RDWR:US) from the region last year.

“Last quarter the company missed the numbers and they set the bar really low for the June quarter because of it,” Henderson said. “If they miss again in Europe in the June quarter, then they’ve got a structural problem in the sales force and they’re going to need to fix it.”

Partner, Gazit

Radware announced its first buyback since 2011 on April 25 after almost doubling cash and equivalents to $209.3 million in the three years to the end of 2012, according to data compiled by Bloomberg. Shares have tumbled 19 percent in the past year.

The Bloomberg Israel-US measure snapped a four-day rally, falling to 95.74. The TA-25 Index (TA-25) was little changed at 1,230.13 at 10:12 a.m. in Israel

Partner, based in Rosh Ha’Ayin, Israel, declined 4.7 percent to $7.48, after rallying the most in seven months July 22. The shares in Tel Aviv this morning slipped 0.3 percent to 27.07 shekels, or $7.57.

Gazit-Globe, the multinational real estate company, gained 0.4 percent to $13.69. The Tel Aviv-listed stock advanced for the first time this week, rising 0.2 percent to 48.55 shekels, or $13.58.

To contact the reporter on this story: Jessica Summers in New York at jsummers17@bloomberg.net

To contact the editor responsible for this story: Brendan Walsh at bwalsh8@bloomberg.net


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Companies Mentioned

  • RDWR
    (Radware Ltd)
    • $17.77 USD
    • 0.12
    • 0.68%
  • LMT
    (Lockheed Martin Corp)
    • $179.57 USD
    • 0.77
    • 0.43%
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