WRAL Tech Wire

Tekelec tops Street estimates for profits but reports dip in order backlog

Telecommunications gear and software firm Tekelec (Nasdaq: TKLC) beat Wall Street expectations for profits in the third quarter, but the company acknowledges the tough global economy is having an impact on orders.

Tekelec posted a profit of 19 cents per share, or three cents higher than the consensus of analysts polled by First Call/Thomson Financial. However, revenues of $106 million were lower than the forecast of $108.87 million. Revenues still were 8 percent higher than in the same quarter for 2007.

Looking ahead, Tekelec reported that its backlog of orders dropped to $369 million from $387.6 million in the second quarter.

"We believe that our order input for fourth quarter may be impacted by the availability of credit in the developing world and depreciation of (the) U.S. dollar versus currencies in developing countries," Reuters reported Tekelec Chief Financial Officer William Everett as saying in a conference call with analysts.

Tekelec Chief Executive Officer Frank Plastina said in a statement that orders so far in 2008 remained ahead of the pace set in 2007.

“Our revenues and operating margins continued to be strong, and our operating cash flows for the third quarter were exceptional,” he said. “While our new orders for the quarter were lower than anticipated, on a year-to-date basis, our orders continue to be 7 percent ahead of last year.”