Orckit swings to profit

Company specializing in Broadband telecommunications networks earned $7.6m.

Shares in Orckit Communications rocketed on Monday after the company said it swung to a third-quarter net profit and that it expects strong growth in the fourth quarter and in 2006. The Tel Aviv-based company, which makes equipment for broadband telecommunications networks, said net profit for the three months ended September 30 was $7.6m., or 45 cents a share. A year earlier, Orckit posted a net loss of $5.9m., or 45 cents a share. Revenue surged to $25.4m. from $2m. Two analysts surveyed by Thomson Financial expected EPS of 23 cents and revenue of up to $24m. For the fourth quarter, Orckit expects net profit of $6.9m., or 41 cents a share, on revenue of $32m. For the full year, it expects net income of $21.5m., EPS of $1.25 and revenue of $100m. For 2006, Orckit expects EPS to jump 20% from 2005 and for revenue from existing customers to climb 25% compared with total revenue this year. Investors reacted enthusiastically to the report, sending Orckit shares up 31% to $20.86 in midday trading on Nasdaq. Orckit President Izhak Tamir said earnings in the quarter were boosted by the installation of Corrigent's CM-100 product line by telecommunications operator KDDI in Japan, a deployment that should continue into 2006. Earnings also included a capital gain of approximately $2.4m. from the sale to Broadcom of Orckit's holdings in Siliquent Technologies, a privately-held semiconductor design company. Excluding the gain, net income for the quarter was $5.2m, or 30 cents per share. Nine-month net profit was $14.6m. compared with a loss of 17.2m., diluted EPS was 84 cents compared with losses of $1.32, and revenue rose to $67.8m. from $2.7m.
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