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Orckit Shares Advance on Analyst Report

Monday December 5, 1:41 pm ET
Orckit Communications Shares Climb After Analyst Notes Coming Business Opportunities in Japan


NEW YORK (AP) -- Shares of Orckit Communications Ltd. jumped Monday after an analyst noted coming business opportunities in Japan for the communications networking equipment maker.
The Tel-Aviv, Israel-based company's shares rose $1.75, or 8 percent, to $23.90 in midday trading on the Nasdaq. In the past 52 weeks, the stock has fluctuated between a low of $7.18 and a high of $29.55.

RBC Capital Markets analyst Daniel Meron, who rates the company at "Outperform" with a $34 target price, wrote in a client note that recent changes in the Japanese market may mean more business opportunities for the company in 2006.

Specifically, planned network and service convergence by Nippon Telegraph and Telephone Corp. "plays to the strength of Orckit's offering," he wrote.

Ensuing competition, market dynamics and regulation may "further expedite carrier shift to convergence" in Japan, leading to more opportunities for Orckit and other companies, the analyst added

Meron said some of the opportunities may materialize next year, but added it is not clear "when deployments will commence and on what scale."

Orckit's products, he wrote, were evaluated by several Japanese carriers for many months. The analyst cautioned clients that "sales cycles may stretch and test investor patience."

Besides opportunities in Japan, Meron added he also sees potential in Europe and Korea for the company as carrier competition grows.