U.S. Fast-Lane Internet Push Spurs Allot Weekly Advance

Allot Communications Ltd. (ALLT), the Israeli maker of technology used to track wireless traffic, had its best weekly gain in three months on speculation a U.S. regulator’s proposal will open up new markets for the company.

Shares of Hod Hasharon, Israel-based Allot climbed 4.9 percent in the week to $12.63. The Bloomberg index of the most-traded Israeli stocks in the U.S. slid 1.6 percent to 114.02. Mellanox Technologies Ltd. (MLNX), which makes equipment that speeds data transfers, plunged after reporting sales that missed analysts’ estimates.

Three months after a court struck down a U.S. Federal Communications Commission rule requiring broadband companies to treat traffic equally, the agency is considering letting Internet providers charge for faster routes. Allot, whose technology lets carriers sort network traffic better by knowing what’s being sent, will benefit if the fast lane is approved, according to Alex Henderson at Needham & Co.

“If you’re going to do that, you need a device like the one Allot sells to manage that process,” Henderson, an analyst at Needham in New York, said by phone April 25. “It’s inevitable that there’s going to be distinctions between traffic types on the network. That’s an open field that’s still to be plumbed.”

The regulator’s proposal would let service providers such as AT&T Inc. (T) and Comcast Corp. negotiate deals with content makers including Netflix Inc. and Amazon.com Inc. (AMZN) for preferential connections to consumers’ televisions and computers. Chairman Tom Wheeler has said he’ll push for a preliminary vote at the FCC next month, and wants to have a rule in place by year-end.

‘Net Neutrality’

The FCC has been seeking to replace a rule voided in January by a U.S. court that has come to be commonly known as “net neutrality.” The regulation required companies that provide businesses and consumers high-speed Internet service over wires, or broadband, to treat all Web traffic the same and didn’t let them charge for faster or more-reliable access.

Elizabeth Levit, a spokeswoman for Allot, said no company official was available for comment outside business hours in Israel.

Allot will say on April 30 that first-quarter adjusted earnings tripled to 6 cents a share, according to the average of 10 analyst estimates compiled by Bloomberg. Sales increased 7.6 percent to $25.95 million, the forecasts show.

The Tel Aviv shares dropped 4.7 percent at today’s close in Israel, tracking the New York-listed stock’s decline on April 25.

Mellanox, SodaStream

The Bloomberg Israel-US Equity Index trimmed this year’s gain to 2.5 percent. That compares with a 4.6 percent advance for the local benchmark TA-25 Index through April 24. The Israel gauge fell 0.5 percent this morning.

Mellanox tumbled 8.6 percent to $33.61 last week. Sales at the Yokneam Elit, Israel-based company missed estimates amid a delay in purchases by high-performance computing customers, according to Piper Jaffray Cos.

SodaStream International Ltd. (SODA) jumped 8.3 percent to $43.31 after daily newspaper Globes reported Starbucks Corp. (SBUX) is in talks to buy a 10 percent stake in the maker of home soda machines. Jim Olson, a Starbucks spokesman, declined to comment on SodaStream. Yonah Lloyd, SodaStream’s communications officer, said the company doesn’t comment on rumors.

To contact the reporter on this story: Gabrielle Coppola in New York at gcoppola@bloomberg.net

To contact the editors responsible for this story: Nikolaj Gammeltoft at ngammeltoft@bloomberg.net; Rita Nazareth at rnazareth@bloomberg.net; Marie-France Han at mhan30@bloomberg.net Robert Lakin, James Doran

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