Tekelec shares plunge 10% despite higher than expected profit

Updated Aug. 5, 2009 at 4:54 p.m.

Tekelec shares plunge 10% despite higher than expected profit

On The Web

Site Search

By Local Tech Wire

MORRISVILLE, N.C. – On a day when tech stock bellwether Cisco disclosed a decline in sales of close to 20 percent, Tekelec (Nasdaq: TKLC) reported earnings early Wednesday that beat Wall Street analysts expectations by 3 cents per share.

The telecommunications gear maker, which is based in Morrisville, reported a slight drop in overall revenues of 2 percent despite the global recession.

Tekelec focuses on signaling and messaging technology, especially in wireless – areas of the global economy that has weathered the economic storm as the increase of wireless devices and networks increases worldwide. Its shares have nearly doubled in value since sinking to $10.63 on Nov. 20. Shares closed at $18.53 on Tuesday, up $5.19 for the year. On July 23, Tekelec hit $19.68, its 52-week high.

However, investors weren't impressed. Tekelec shares fell 10 percent Wednesday, or $1.81, to close at $16.72.

“In the second quarter Tekelec continued to achieve solid operating results with strong revenues and operating margins despite a challenging economic backdrop around the world,” said Tekelec Chief Executive Officer Frank Plastina.

Minus one-time expenses and items, Tekelec said it earned a profit of 25 cents per share, or $16.8 million, on revenues of $114.2 million. Analysts polled by Thomson Reuters had predicted a 22 cent profit. Analysts generally exclude one-time expenses from their forecasts.

Revenues were down 2 percent from $116.4 million for the same quarter a year ago.

Orders declined to $104.7 million from $122.9 million in 2008’s second quarter. Tekelec also reported an order backlog of $353.3 million, down from $387.6 million a year ago.

Despite the order drop, Tekelec did increase its revenue forecast slightly for the year to a range of $450 million and $460 million from $420 million and $460 million.

“Our orders in the first half of the year were consistent with our expectations and we continue to expect our orders to strengthen in the second half of the year,” Plastina said.

Through June 30, Tekelec reported $230.8 million in sales, a decline of 2 percent from 2008.

Tags: Tekelec, Local Firms

Editor's Blog

The latest blog posts from our WRAL Tech Wire and WRAL editors. Read more articles…

WRAL Tech Wire