8/29....CMVT...second quarter profits rise, top forecast
(UPDATE: adds byline, analysts' comments in paragraphs 7-11, recasts paragraph 12.)
By Ilaina Jonas
NEW YORK, Aug 29 (Reuters) - Comverse Technology Inc. (NasdaqNM:CMVT - news), maker of software that allows wireless communications systems to add services, said on Tuesday its fiscal second-quarter earnings rose 52 percent, topping expectations, as network operators demanded products for services such as messaging and call answering.
For the three months ended July 31, the Israeli-based company said earnings rose to $62.5 million, or 36 cents per diluted share, from $41 million, or 26 cents, in the same period a year earlier, excluding a one-time acquisition charge of $10.8 million.
Analysts had expected the company to earn 34 cents per diluted share, according to First Call/Thomson Financial. It was the 25th consecutive quarter the company beat estimates.
Including the charge, the company reported net income of $51.7 million, or 30 cents per diluted share.
Revenues soared 35 percent to $292 million from $217 million in the second quarter 1999. Several analysts said they expected the company to book $270 million in revenue in the second quarter.
``The acceleration in our second quarter sales growth reflects continued strong demand for Comverse's products, particularly among wireless network operators, which account for the majority of our sales,'' Kobi Alexander, Comverse chairman, president and chief executive, said in a statement.
U.S. Bancorp Piper Jaffray analyst Edward Jackson said a key point of the report was the company's aggressive growth in non-voice mail revenue areas -- prepaid and wireless data services -- which grew 100 percent.
``In the world of network-based wireless services, this is the Wild West. This is the new frontier. It's an entirely new market opportunity and they're doing very well in it.''
Based on the second-quarter performance, Jackson is raising his revenue and earnings estimates for the next couple of years. For 2000 Jackson said he sees Comverse booking $1.18 billion in revenues, up from $1.11 billion, and earning $1.41 a share, up from $1.38. For 2001 those figures jumped to $1.47 billion from $1.38 billion and $1.70 a share from $1.64 a share.
Although the figure is not official, Jackson said he is considering initiated a 2002 estimate of $1.83 billion in revenue and earnings of $2.04.
Finally, Jackson said he may raise the firm's $120 a share target price. Victor Halpert of Salomon Smith Barney said he would raise his firm's target price of $105. He also planned to raise estimates.
During the second quarter, the company added 10 additional customers bringing the number of telecommunications network operators have chosen to use Comverse's enhanced services systems and software to 340. Those services allow networks to earn revenue by providing services, such as wireless data and Internet-based information services, prepaid wireless services and unified messaging -- voice, fax, and e-mail in a single mailbox.
Shares of Comverse, whose U.S. headquarters is in Woodbury, N.Y., was at 88-1/2 in after-hours trading, down from its close of 89-9/16 on Nasdaq. The stock has had a steady run up since Aug. 8, when it closed at 77-3/16. The company's 52-week high was 123-7/8 and its low 38-1/16 |
