MagicJack Rallies on Prospects Lower Costs to Boost Earnings
MagicJack VocalTec Ltd. (CALL) jumped the most in three weeks in New York on speculation lower marketing costs will boost this year’s net income.
The Israeli company, whose founders invented the technology used for making phone calls over the Internet, surged the most since Oct. 19, increasing 9.6 percent to $20.07 at the close of trading in New York.
MagicJack, based in Netanya, Israel, expects to spend less on marketing this quarter as its new mobile telephone product won’t begin production for two weeks, Chief Executive Officer Daniel Borislow said by phone from West Palm Beach, Florida. The company said earlier today in a statement that it raised its 2012 operating income forecast to $155 million, without specifying a previous estimate.
“They’re saying operating income will be higher because they’re waiting for the new products before they ramp up marketing expenses,” Timothy Horan, an analyst at Oppenheimer & Co. in New York who has the equivalent of a buy rating on the shares, said by phone today. “These products will contribute well to revenue and earnings over the next three years.”
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