Opera Drops After Cutting Forecast, Starting Strategy Review

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Opera Software ASA fell to the lowest level in five months after the Norwegian maker of Internet browsers cut its 2015 sales forecast and said it received “strategic interest” from a number of parties.

Opera slumped as much as 13 percent, the most since Feb. 11, and was down 10 percent at 54.8 kroner as of 10:58 a.m. in Oslo. About 2.7 million shares have traded so far, almost four times the three-month average daily volume.

The company, with a market capitalization of 8 billion kroner ($1 billion), develops browsers that compete with those of Apple Inc., Google Inc. and Microsoft Corp. Its revenue has risen more than 30 percent for the past four years, though the company said sales growth is set to decelerate more than predicted this year because of slowing mobile advertising demand.

Opera said separately that it started a review to consider “strategic alternatives” after receiving “strategic interest” from a number of parties. The Oslo-based company hired ABG Sundal Collier ASA and Morgan Stanley International as advisers and expects to conclude the review in the second half.

Potential buyers include social networks, wireless carriers and Web portals, said Christer Roth, an analyst at DNB ASA in Oslo with a buy rating on the stock.

“The interest for Opera’s assets is large because most of it is within mobile advertising to Western users, and they are strongest in the U.S.,” he said. “We see the statement about the strategic review as an invitation to other potentially interested parties.”

Advertising Slowdown

Revenue will rise to $600 million to $618 million this year, compared with a prior forecast of $630 million to $650 million, Opera said.

The company said revenue grew slower than it predicted in its “non-Instant play video advertising” business in the latter part of the second quarter and in July. It is now projecting mobile advertising revenue this year of $392 million to $405 million, compared with a previous forecast of $445 million to $455 million.

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