Tower Gains as India Plant Report Boosts Outlook: Tel Aviv MoverShoshanna Solomon
Tower Semiconductor Ltd. rose the most in a month after Calcalist reported that the loss-making Israeli chip-maker will provide equipment and advice for a project in India.
The shares climbed 4.1 percent to 17.60 shekels at the close in Tel Aviv, paring the decline this month to 23 percent. The benchmark TA-25 Index declined 0.3 percent. Tower was part of a group including International Business Machines Corp. and India’s Jaypee Infratech Ltd. that will operate the chip-making plant, Calcalist reported today, without saying where it got the information.
“This will help revenues and profits at the company and shows that the fundamentals are strong,” Eran Jacoby, the head of research at DS Securities & Investments in Tel Aviv, said in a telephone interview. “It may also lead to additional ventures with IBM.”
The contract will generate about $300 million in revenue over six years, according to the Calcalist report. Chief Executive Officer Russell Ellwanger last year forecast that winning the bid could add “hundreds of millions of dollars” to the company’s gross margin. Ellwanger said in May that a decision on the plant was expected that month.
Around 1.3 million shares of Tower were traded today, more than four times the daily average of the past three months. A spokeswoman at the chip-maker, who asked not to be identified citing company policy, declined to comment when contacted by Bloomberg News today.
Tower shares have dropped 40 percent this year, lagging a gain of 0.9 percent for the benchmark index. The Migdal Haemek, Israel-based company has posted losses for the past six quarters, according to data compiled by Bloomberg.