Bloomberg story says AFC's "imminent" contract is most likely w/ SBC and is valued at $25-$40 million per year.....
Advanced Fibre Rises 28% on Speculation of New CEO, Contract
(http://quote.bloomberg.com/analytics/bquote.cgi?story_num=42764103&view=story&version=marketslong99.cfg)
Petaluma, California, March 31 (Bloomberg) -- Advanced Fibre Communications's shares rose 28 percent on speculation that the phone-equipment maker is close to hiring a new chief executive
and announcing a supply contract.
Advanced Fibre rose 2 3/32 to 9 19/32 in trading of 7.57 million, more than triple the three-month daily average. The shares had lost almost half their value since mid-January.
Advanced Fibre, which makes equipment that boosts the capacity of phone networks, is close to naming a new chief executive nine months after Chief Executive Carl Grivner resigned to join Cable & Wireless Plc, analysts said. An "imminent" contract with a local phone company, most likely SBC Communications Inc., the second-largest in the U.S., could be valued at $25 million to $40 million a year, analysts said.
"This is a company that's had a really poor track record of executing," said Dain Rauscher Wessels analyst George Notter, who rates Advanced Fibre "neutral." A contract with a company like SBC "gives them more credibility," he said.
Petaluma, California-based Advanced Fibre last year earned $27.2 million, or 34 cents a share, on revenue of $312.7 million.
Advanced Fibre couldn't be immediately reached for comment. SBC spokesman Larry Solomon said the company doesn't comment on speculation.
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A contract of $45 million per year would represent a 14% increase in annual revenues and more importantly provide AFC more credibility going forward when working with other RBOC's.
If such a contract is landed, it should help replace the concerns from the one lost with GTE last October.
EKS |
