Westell shares rise on good earnings
CHICAGO, July 20 (Reuters) - Shares of Westell Technologies Inc. (NasdaqNM:WSTL - news) rose 15 percent on Thursday, a day after the telecommunications equipment firm reported a profit for the first time since its initial public offering in 1995.
Westell's stock rose as high as 25-11/16 on Nasdaq in morning trade before settling a bit at 25, up 3-1/4 from Wednesday's close.
The company had reported better-than-expected fiscal first quarter results late Wednesday, recording a more than three fold increase in revenues to $107.9 million and pro forma net income of $3.7 million, or 6 cents a share, beating analysts' consensus estimate by four cents.
Analysts said the stock movement was only a small reflection of Westell's performance. ``The stock movement today is nothing. This should be a $45 stock today. I'm actually disappointed,'' Reginal King, analyst with Chase H&Q, said.
Barry Sine, telecommunications equipment analyst with Kaufman Brothers, told Reuters, ``Their revenue of $108 million was more than we were expecting for this quarter, more than we were expecting for next quarter and better than even what we thought they were going to do for the December quarter.''
``Even the most sceptical person out there who's looking at broadband has to own up to the fact that Westell is actually a player now,'' King added.
Ted Moreau, analyst with Robert W. Baird, also attributed the stock movement to news that Westell had been chosen as a high-speed DSL (digital subscriber line) modem provider by SBC Communications Inc. (NYSE:SBC - news) and Verizon Communications (NYSE:VZ - news), which was formed by the merger of Bell Atlantic and GTE. ``We think we're going to see further acceleration in the company in terms of margin improvement, revenue and earnings,'' he said.
All of the analysts said they would be revising their earnings estimates.
Ray, looks like we are all on the same page, my numbers 26,29,35 as resistance points. m |
