May 1 (Bloomberg) -- Allot Communications Ltd. rallied to a record after the Israeli maker of high-speed networking equipment said it was buying Ortiva Wireless Inc. and as the company’s first-quarter profit and sales beat estimates.
Shares of the Hod Hasharon, Israel-based company advanced as much as 18 percent and closed 7.9 percent up at 99.05 shekels, the equivalent of $26.23, in Tel Aviv, the highest since December 2010 when the stock was listed in Israel. The TA-25 index gained 0.2 percent.
Allot said today it agreed to buy La Jolla, California-based Ortiva Wireless, a developer of mobile video technology, for an undisclosed sum. The company’s first-quarter net income doubled to $3.2 million as revenue climbed 41 percent to $24.2 million, it said. Profit beat the average $2.95 million forecast of eight analysts compiled by Bloomberg while sales topped the $21.4 million forecast of 10 analysts.
“The strong numbers are indicative of the company’s strong momentum in the network traffic-management space,” Daniel Meron, an analyst for RBC Capital Markets in Tel Aviv, said by phone today. “Ortiva is a complementary acquisition.”
Ortiva’s technology enables mobile service providers to manage increasing volume of video traffic on their networks, Allot said in a statement. As more people use smartphones and computer tablets, rising demand for Allot’s technology to manage traffic on networks has driven the share price up 65 percent this year. The stock trades at 47 times estimated earnings, compared with an average of 11 times for companies traded on the benchmark TA-25 index.
“Revenues continued to grow during the quarter as we continue to see a healthy inflow of both new and expansion orders,” Allot President and Chief Executive Officer Rami Hadar said in a statement today.
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