AudioCodes Dn 31% As Competitor Lowers 4Q Earnings View
(Trilobyte: Found this article. Check it out. Peter.)
Dow Jones Newswires December 5, 2000
By K. Maxwell Murphy / Of DOW JONES NEWSWIRES
NEW YORK -- The bottom continued to drop for AudioCodes Ltd. (AUDC) stock Tuesday, as it hit a 52-week low for the second time in less than a week, after a competitor's announced that sector slowdowns would lead to a weaker-than-expected fourth quarter.
As reported, networking and communications equipment supplier Natural MicroSystems Corp. (NMSS) said an ordering slowdown in certain communications sectors would lead to fourth-quarter revenue of about $40 million, flat with the third quarter. As a result, the company expects earnings of 6 cents to 8 cents a share for the quarter, lower than the 12 cents analysts expected.
There was "no company news, no bad news" Tuesday which would account for AudioCodes precipitous drop, and there "probably was a trickle-down" effect from the Natural MicroSystems news, said Magda Gagliano, a AudioCodes spokeswoman from investor relations agency Ruder Finn Inc.
Gagliano said a look at past press releases about AudioCodes customers and the strength of its business are "clearly not indicators" of a company experiencing a slowdown, but acknowledged that many of its client companies were "are getting bashed" by the markets.
She said she couldn't comment if any of AudioCodes customers had lowered, deferred to a future quarter, or otherwise altered ordering arrangements with it, in the way Natural MicroSystems said some of its customers had. Gagliano said she knew of no press releases regarding a slowdown warning "in the pipeline."
Shares of AudioCodes were recently trading at $12, down $5.31 or 30.7%, on Nasdaq volume of 5.8 million compared with the daily average of 764,388. The stock bottomed at $10.19 earlier in the session, replacing the previous 52-week low of $15.81 set Nov. 30. The stock peaked at $76 on May 10, adjusted for an October 2-for-1 stock split.
Shares of Natural MicroSystems, Framingham, Mass., were even worse off, recently down 54.7%, or $10.25, at $8.50 on Nasdaq volume of 8.9 million shares compared with a daily average of just over 1 million. Natural MicroSystems, too, is far from its year high, $78.63, adjusted for an early August 2-for-1 stock split.
Officials from AudioCodes, Yehud, Israel, were not immediately available for comment on how sector ordering slowdowns, if any, might affect its business, or if its clients had changed ordering practices in any way.
There is no reason to believe that AudioCodes' fourth quarter is "in jeopardy at this juncture at all," said Ted Jackson, an analyst who covers both the company and Natural MicroSystems for U.S. Bancorp Piper Jaffray. On Tuesday Jackson lowered Natural MicroSystems' rating to buy from strong buy, and he keeps a strong buy rating on AudioCodes.
The "closest comparable competition" for Natural MicroSystems is AudioCodes, Jackson said, "so you can understand" the sympathetic drop in AudioCodes shares.
However, the only company AudioCodes and Natural MicroSystems share as a client is Clarent Corp. (CLRN), and 100% of AudioCodes business is in the "hottest-growing area in telecom," voice-over-packet technology.
Jackson said he is not trying to discount the problems Natural MicroSystems is having and the potential spillover it could have for AudioCodes, but the relationship the companies have is "not 1-to-1" between the two companies.
He said he is confident AudioCodes will deliver a fourth quarter in line with his expectations. Jackson is currently attending a Cisco Systems Inc. (CSCO) conference, he said, and did not have immediate access to his AudioCodes numbers.
Other analysts following the two companies were immediately unavailable, and Natural MicroSystems officials couldn't immediately be reached for thoughts on how its clients' ordering changes might affect other players in the space.
Clarent's stock was recently trading at $14.63, down 5.6% on volume of 1.3 million compared with average daily volume of more than 1 million.
-By K. Maxwell Murphy, Dow Jones Newswires; 201-938-5173; maxwell.murphy@dowjones.com |
