Nice Systems Ltd. fell the most since 2008 after the Israeli maker of analytical telecommunications software cut its outlook for the year as the global economic slowdown crimped demand for its products.
The shares of the Ra’anana, Israel-based company dropped 11 percent, the biggest decline since November 2008, to 126.70 shekels at the close in Tel Aviv. Nice’s American depositary receipts slumped 11 percent to $31.98 at 10:04 a.m. in New York, the largest retreat in three years.
Weaker demand in Europe and China is hampering sales at some of the largest technology companies as Applied Materials Inc. sliced its earnings forecast and Acme Packet Inc. reported an unexpected decline in preliminary sales. Global server sales fell 2.4 percent in the first quarter, driven by a 14 percent decline in western Europe, according to a July 10 Bloomberg Industries report by analyst Anand Srinivasan.
“We might see declines continue in next quarters as the company needs to deal with competition and lower prices in a slowing global environment,” said Tsahi Avraham, analyst at Clal Finance Brokerage Ltd. in Tel Aviv. “Nice needs to innovate itself to uphold growth and boost revenues.”
Nice reduced its 2012 revenue projection to a range of $890 million to $910 million from a previous estimate of as much as $950 million. The company also lowered its 2012 outlook for adjusted earnings per share to as much as $2.38. The mean estimated of 11 analysts on Bloomberg was for earnings per share of $2.44.
“We are following a more moderate and conservative guidance approach since we are not closing deals at the rate we wanted and customers are putting pressure on budgets,” Chief Financial Officer Dafna Gruber said in a phone interview today. “We still expect operating margins to remain intact.”
The shares trade at 13 times estimated earnings for the year, compared with an average 11 times for stocks in the country’s TA-25 benchmark stock index.
Clal on July 4 cut Nice to market perform from outperform and reduced its 12-month price estimate 7 percent to $40. DS Securities & Investments Ltd. today lowered Nice to market perform and cut the share-price projection to $39 from $41.
The shares closed in Tel Aviv today at the equivalent of $32.03.