Allot Communications Ltd. dropped to the lowest level in more than a year on concern growth in 2013 may slow after quarterly earnings of competitor Procera Networks Inc. missed estimates.
Shares of the Israeli maker of products that track wireless traffic, retreated 7.7 percent to 49.09 shekels ($13.19) at 1:29 p.m. in Tel Aviv, the lowest intraday level since November 2011. Allot’s U.S.-traded shares dropped 8.7 percent to $13.09 in the two days after Procera’s February results announcement. Allot’s trading volume in Tel Aviv today was 1.2 times the three-month average daily volume. The benchmark TA-25 Index fell 0.3 percent to 1,217.38.
Shares of Procera, which also helps cable companies and mobile operators report on network traffic, plunged 32 percent last week after the Fremont, California-based company forecast 2013 revenue growth of 25 to 30 percent, missing analyst forecasts for 33 percent growth. The outlook may signal a broader industry slowdown, Dov Rozenberg, an analyst at Clal Finance Batucha Brokerage Ltd. in Tel Aviv, said today by phone.
“There are concerns that this predicts a market weakness that will affect also Allot,” Rozenberg said. “The market is expecting first-quarter revenues to be essentially flat because the macro-economic situation globally makes it tougher to close deals.”
Allot’s stock has tumbled 57 percent since hitting a record high on Sept. 11 on concern over lower demand. Revenue is forecast to rise 15 percent year-on-year in the first quarter, compared with annual growth of 41 percent in the first quarter of 2012. The company, which derived 62 percent of 2011 sales from Europe and the U.S. according to data compiled by Bloomberg, posted sales growth of 35 percent in 2012, just below analysts’ estimates.
U.S. Commerce Department data showed last week that consumer spending, which accounts for about 70 percent of the U.S. economy, rose 0.2 percent in January, matching the median estimate in a Bloomberg survey. Incomes slumped 3.6 percent.
“The customers have stopped spending temporarily,” Sanjit Singh, a New York-based analyst at Wedbush Securities Inc. who rates Allot shares neutral, said by phone on March 1. “It’s not that the projects are going away, we just don’t know when they’re going to land.”