Earnings: ECI Telecom net income falls on decline in broadband sales

Net income declined to $2.3 million, or 2 cents a diluted share, from $7.6m., or 6 cents, a year earlier.

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February 1, 2007 21:48
3 minute read.

ECI Telecom Ltd., a maker of telecommunications equipment, said fourth-quarter profit fell by two-thirds after sales in its broadband access division dropped. Net income declined to $2.3 million, or 2 cents a diluted share, from $7.6m., or 6 cents, a year earlier. Revenue fell to $154m. from $169m., the Petah Tikva-based company said Thursday. "Sales at our broadband access division declined in the third and fourth quarters due to weaker demand from the division's two principal customers, but we expect them to gradually recover during 2007," Chief Executive Officer Rafi Maor said. ECI's sales have risen every year since 2003, helped by orders from emerging markets and for optical gear. Revenue growth slowed in 2006 when orders for broadband access equipment fell as two major customers, Deutsche Telekom AG and France Telecom SA, delayed purchases because of technological and regulatory issues. Sales at ECI's optical network division rose 17% to $103m. in the quarter from a year ago while its broadband access unit saw sales drop 41% to $40m. "Broadband will rebound starting in the first quarter,"Chief Financial Officer Giora Bitan said in a phone interview. "We will see revenue growth from new customers with existing customers making up a significant part of revenue as well." The company forecast revenue and net income, excluding charges, for the first quarter to be unchanged from the fourth quarter with subsequent growth in the rest of the year. For all of 2007, ECI forecast revenue growth of between 4% to 8%, with net income growing faster than sales. In the fourth quarter, income excluding share-based compensation, acquisition and restructuring costs was $10m., or 8 cents a share, ECI said. The average of five analyst estimates compiled by Bloomberg was earnings per share of 9 cents, excluding charges. ECI also said that Bitan is expected to leave in the first quarter of this year. Bitan said he would be managing a new $100m. fund for Poalim Capital Markets, a unit of Bank Hapaolim Ltd. Revenue for the year rose 4% to $656m. Net income fell to $22.1m., or 18 cents a share, from $39.9m., or 34 cents. • Bloomberg Perrigo Q2 net dropson lower sales, drug recall Perrigo Co., the biggest US maker of non- prescription, store-branded drugs, said fiscal second-quarter profit fell 17% because of a mild flu season in December and a recall of its acetaminophen drug in November. Net income fell to $21.1m., or 23 cents a share, in the three months ended December 30, from $25.4m., or 27 cents, a year earlier the company said. Revenue increased 3% to $371m. Profit fell because of lower-than-anticipated sales of cough, cold and pain reliever products, Joseph Papa, Perrigo's president and chief executive officer said. Perrigo recalled on November 9 about 11 million bottles of acetaminophen pills sold since 2003, saying they may be contaminated by bits of metal. • Bloomberg Exxon Mobil tops own earnings record Not even industry titan Exxon Mobil Corp. was immune to the oil industry's deteriorating conditions in the fourth quarter, announcing Thursday that overall net income declined 4%, hurt by lower natural-gas realizations and refining margins. But while 2006 ended on a sour note, the world's largest publicly traded oil company still managed to generate the highest annual profit in US corporate history of $39.5b., eclipsing the prior record of $36b. it set in 2005. Exxon Mobil also set a record for annual revenue: $377.6b. in 2006, up from 2005's $370b. For the fourth quarter, Exxon Mobil reported net earnings of $10.25b., or $1.76 a share, on revenue of $90.03b. The profit figure includes a special tax-related gain of $410m. In the same period a year earlier, the Irving, Texas-based company earned $10.71b., or $1.71 a share, on revenue of $99.34b. On an adjusted basis, excluding special items, the company earned $9.84b., or $1.69 a share, in the latest quarter. In the year-ago period, excluding items, Exxon earned $10.32b., or $1.65 a share. Analysts had, on average, expected the company's earnings to fall 9% to $1.51 a share and revenue to remain flat at $100b. MarketWatch


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