RRSat CEO Says Sales to Beat Estimates: Israel Overnight
RRSat Global Communications Network Ltd. (RRST) will earn more revenue than analysts estimate in 2013 as the Israeli satellite video provider benefits from rising demand for live sports events, Chief Executive Officer Avi Cohen said.
The company is also targeting more acquisitions after buying SM2 Sports & Media Solutions, an international distributor for the National Football League, in November, Cohen said in an interview at Bloomberg’s headquarters in New York yesterday. Revenue will increase 4.9 percent to $118.5 million this year, according to the mean of two analysts’ estimates compiled by Bloomberg.
“There’s a good chance that we’ll beat” sales projections, said Cohen, who was appointed RRSat’s CEO on June 27. “We’re moving aggressively into managing video and sporting events, and turning that into content for television channels.”
RRSat, based in Airport City, Israel, rallied 3.2 percent to $7.7 in New York yesterday, the highest level since February 2011. The stock has soared 80 percent over the past year, making it the sixth-biggest gainer on the Nasdaq Telecommunications Index. (CUTL) The Bloomberg Israel-US Equity Index (ISRA25BN) of the largest U.S.- traded Israeli stocks rose the most in a week, led by Nova Measuring Instruments Ltd. (NVMI) and Mellanox Technologies Ltd. (MLNX)
RRSat held $37 million in cash at the end of the third quarter, according to data compiled by Bloomberg, and would consider taking on debt to make an acquisition, Cohen said.
“We have definitely made M&A part of our growth strategy,” he added. “You can assume we’re looking at targets and possibilities.”
Israel’s TA-25 Index fell for a fourth day in five, dropping 0.2 percent to 1,206.86 at 9:52 a.m. in Tel Aviv. The Bloomberg Israel-US gauge rose 0.4 percent to 86.37 yesterday.
RRSat’s adjusted net income fell short of analysts’ estimates in every quarter in 2010 and twice in 2011, according to data compiled by Bloomberg.
Cohen took over as CEO with a mandate to remake a company that had a “history of overpromising and underdelivering,” Andrew Uerkwitz, an analyst at Oppenheimer & Co., said yesterday by phone from New York.
“Cohen is all about developing a growth strategy for a company that has underperformed expectations,” said Uerkwitz, who has a perform, or neutral, rating on RRSat. “The SM2 acquisition was a big step in that direction. That’s why investors are getting excited.”
RRSat has 4 million shares publicly traded, which compares with 52.7 million shares for Cellcom Israel Ltd. (CEL), the country’s largest mobile phone operator.
“When the price is right,” RRSat will consider increasing the company’s float, Cohen said. “If the market gets to where the price should be, a secondary is definitely a possibility.”
Nova Measuring surged in New York to widen its premium versus the Israeli shares to 41 cents, the most since Oct. 31. Nova shares traded in New York jumped 5.5 percent to $8.27 on trading volume that was three times the stock’s three-month daily average, according to data compiled by Bloomberg. The stock in Tel Aviv this morning rose 4.6 percent to 30.65 shekels, or the equivalent of $8.22.
Mellanox, the Israeli developer of data-management technology, gained 3.2 percent in New York to $52.74, the highest since Jan. 2. Shares traded in Tel Aviv today gained 2.4 percent to 196 shekels, or $52.59.
Perion Networks Ltd. (PERI), which sells e-mail, photo sharing and Internet security products, gained 1.1 percent to $12.33 as Benchmark Co. began coverage with a buy rating and a 12-month price target of $17. Perion shares in Israel yesterday advanced 1.2 percent to 47.23 shekels, or $12.67.
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