This is bullish !
Telcom spending for wireless sector is finally back and OPWV should benefit !!
Nokia's Outlook Gives Boost to Wireless Stocks
Thursday January 8, 4:48 pm ET
By Michelle Rama
NEW YORK -- Shares of companies that make software for wireless phones surged Thursday, amid mounting expectations that business conditions are improving.
Sparking the rally was Finnish wireless-phone maker Nokia Corp. (NYSE:NOK - News) , which boosted its end-of-year sales and profit estimates, noting strong handset sales growth and an unexpected rise in spending by network operators.
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"Nokia is a solid macro indicator for wireless tech spending," Raymond James analyst Mike Latimore said. "While not always a direct correlation to other leading vendors, the data suggests an increasingly positive environment for several of our wireless software names."
The most direct beneficiary of improving conditions is Openwave Systems Inc. (NasdaqNM:OPWV - News) , Mr. Latimore said, followed by Comverse Technology Inc. (NasdaqNM:CMVT - News) .
At 4 p.m. EST, shares of Openwave were up $2.37, or 19% at $14.60, on Nasdaq volume of 5.9 million shares, compared with average daily volume of 948,700.
Shares of Comverse were up $1.58, or 9.2%, to $18.68 on Nasdaq volume of 7.2 million shares, compared with average daily turnover of 2.5 million.
In raising its fourth-quarter expectations, Nokia said wireless-network operators across all regions - especially in the U.S. and China - had money left over in their budgets at year's end, translating into higher net sales on the infrastructure side.
Openwave also announced two deals earlier, one with China Unicom Ltd. (NYSE:CHU - News) expanding their mobile data-services relationship, and another with BellSouth Corp. (NYSE:BLS - News) , which will use Openwave's multimedia messaging-service center in South America.
Raymond James' Mr. Latimore said Openwave, based in Redwood City, Calif., is the "most direct beneficiary" of Nokia's news, since it depends on global handset sales volumes and network-based software infrastructure investment trends.
The analyst said he sees messaging-services provider Comverse Technology benefiting, in particular, from network-based voicemail and enhanced services software sales.
Amdocs Ltd. (NYSE:DOX - News) and Portal Software Inc. (NasdaqNM:PRSF - News) , which develop billing software for mobile-service providers, could also benefit, since much of their revenue comes from the global wireless market, the analyst said.
Shares of Amdocs advanced 93 cents, or 3.6%, to $26.62, and Portal Software rose 37 cents, or 5.4%, to $7.30.
Other companies whose business could get a lift from the trends cited by Nokia include wireless network-management companies like Inet Technologies Inc. (NasdaqNM:INTI - News) and Micromuse Inc. (NasdaqNM:MUSEE - News) , and wireless messaging companies like Intervoice Inc. (NasdaqNM:INTV - News) , Ulticom Inc. (NasdaqNM:ULCM - News) and NMS Communications Corp. (NasdaqNM:NMSS - News) .
-By Michelle Rama; Dow Jones Newswires; 201-938-4046; michelle.rama@dowjones.com |
