Comverse is a "Story Stock" on 'Briefing.Com' today at 13:40 E.T.
briefing.com
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COMVERSE TECHNOLOGY INC (CMVT) 45 9/16 +1 15/16. Benefitting from stronger-than-expected margins
and a more favorable tax rate, this maker of computer and telecommunication systems reported Q1 earnings that
exceeded the First Call mean by 7 cents, or 16%. For the quarter CMVT earned $0.51 a share (diluted), an
increase of 50% over year-ago EPS of $0.34. Sales increased 27% to a record $160.48 million. In reaction to strong
earnings report, Lehman Brothers this morning reiterated its "buy" rating on the stock and raised estimates. For
fiscal year 1998, the firm goes from $2.18 from $1.97, an increase of 10.6%. Lehman's 1999 projection is raised from
$2.62 from $2.45, up 7%. The firm is basing its new $75 price target (up from $65) on the tenet that CMVT shares
should carry a multiple of 25 times 1999 earnings, which would represent a slight discount to the company's projected
long-term earnings growth rate of 30% annum. Also bullish on CMVT is Piper Jaffray, which initiated coverage of the
stock last month with a "strong buy" rating and a 12-18 month price target of $58, equivalent to 24 times Piper's 1999
projection of $2.42 a share. In Piper Jaffray's opinion, CMVT is the best play in the enhanced services industry. This
was CMVT's first full quarter of operations since completing its merger with Boston Technology. In August, at the time
of the merger announcement, CMVT said it expected the deal to be accretive to earnings per share in the first year after
the completion of the transaction.
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