Orckit Communications Ltd fka ORCT

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Orckit slashes guidance for 2006

30.4.06 | 14:26 By Asaf Rothem

Since the end of January, Orckit Communications (Nasdaq: ORCT) stock has slumped by 39%. As last week closed, the company provided grounds for the dive, in the form of depressing guidance for the year 2006.

Orckit basically said that it doesn't expect to deliver any sales growth in 2006, and that's the best-case scenario. The worst is a 20% slide in revenues.

The company is predicting revenues in the range of $80 million to $100 million for 2006, versus $101 million in 2005.

It expects to net $11.5 million to $20 million in 2006. That translates into 68 cents to $1.20 per share.

In the last year, 2005, Orckit netted $22.2 million.

Beforehand its forecast for 2006 had been for $125 million in sales, and net profit of $25.8 million or $1.50 per share.

Yet there were upsides in its announcement too. In the first quarter of 2006, Orckit did much better than expected: revenues grew 20% to $25 million and its net profit shot up 87% to $5.8 million, or 34 cents per share.

The average forecast on Wall Street had been for $24 million revenues and earnings of 21 cents per share.

Orckit stock from 2004

Throughout the last year Orckit was dependent on a single client, the Japanese company KDDI. Every news item about KDDI therefore impacts Orckit stock, and hard. Last week Oscar Gruss published concerns that KDDI's 2006 sales might fall short of forecasts. Orckit's share price promptly lost 15% of its value.

Meanwhile, Orckit says its products are undergoing final testing at no less than six new potential clients, but it has yet to announce a closing with any of them.

http://www.haaretz.com/hasen/spages/711193.html

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