Allot Communications Ltd. (ALLT:US) fell the most in more than seven months after the Israeli maker of technology used to track wireless traffic reported a quarterly loss, missing analysts’ estimates due to a delayed order.
Shares (ALLT) of the Hod Hasharon, Israel-based company plunged 8.7 percent, the most since Jan. 3, to 49.81 shekels, or the equivalent of $14.03 at 5:06 p.m. in Tel Aviv. Allot tumbled 9.9 percent to $14.01 at 10:06 a.m. in New York, also the most in seven months. Before the company reported results today, its U.S.-traded shares surged 7.3 percent yesterday to $15.55, a seven-month high, on bets it will benefit from a rebound in mobile provider spending in the second half of 2013.
Allot reported a $3.9 million loss in the quarter compared to a profit of $2.7 million last year and a $193,000 net mean estimate of seven analysts surveyed by Bloomberg. The company’s sales of $21 million for the quarter were 19 percent below the average estimate of 10 analysts surveyed after a $5 million booking didn’t come through, according to a company statement.
“The below-consensus earnings are very disappointing mainly due to the deal that didn’t materialize,” Dov Rozenberg, an analyst at Clal Finance Batucha Brokerage Ltd in Tel Aviv, said by phone. “The company’s earnings are highly dependent on timely realization of orders, so it will take time for the company to win back investor confidence.”
The missed order will be booked in the second half of this year and, with orders of the last two quarters, will be the basis for resumed growth, Chief Executive Officer Rami Hadar said in a statement today on PR Newswire.
Today’s slump trimmed to 19 percent Allot’s advance since June 24, the day before it got orders from three of the world’s top 10 telecommunication operators. AT&T Inc., the largest U.S. phone company, said on July 24 that it gained 551,000 monthly subscribers in the second quarter, after Verizon Wireless, the second-largest, added 941,000, according to a July 18 statement. Analysts at Northland Securities Inc. and Maxim Group LLC raised their price targets (ALLT:US) on shares of Allot by as much as 13 percent yesterday.
“There’s some rising optimism around service providers spending again,” Brent Bracelin, an analyst at Pacific Crest Securities LLC, who rates Allot the equivalent of buy, said by phone from Portland, Oregon, yesterday. “Ultimately we do expect a second-half rebound in their business.”
T-Mobile, the fourth-largest carrier, increased monthly contract customers last quarter for the first time in three years, according to people familiar with the matter. Qualcomm Inc. (QCOM:US), the largest seller of semiconductors for mobile phones, forecast fiscal fourth-quarter sales that may exceed analysts’ estimates on July 24.
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