Alvarion (TASE, Nasdaq: ALVR) today delivered tepid results for the last quarter of 2005. Its management seems confident, though.
"We are satisfied that we resumed sequential growth in the fourth quarter," commented Zvika Friedman, the company's CEO. "During the fourth quarter we increased sales of broadband wireless access products for WiMax as well, and for non-WiMax based systems. We control 30% of the market for broadband wireless access solutions," Friedman added.
Meanwhile, Alvarion continues to build itself as the leading company in the WiMax space, for fixed and mobile applications. "Remember that we are dependent on regulation approvals relating to frequencies allocated to these markets," Friedman said.
Fourth-quarter revenues were $46.5 million, as the company had guided investors to expect. But Wall Street had expected $47.4 million sales.
Its fourth-quarter sales were up 3% sequentially from $45 million in the third quarter of 2005, but down 17% from the parallel quarter, when it made $55.9 million turnover. The company explained that its parallel results had been skewed by one large customer.
Gross margin was 45% in the last quarter of 2005, consistent with Alvarion's target operating model, it said.
Its losses narrowed, this is true. Alvarion lost a net $4.9 million, or 8 cents per share, against losing $5.5 million or 9 cents per share in the third quarter and losing $6.8 million or 12 cents per share the year before.
The company's pro forma loss was $3.8 million or 6 cents per share in the fourth quarter, as expected. In the previous quarter its pro forma loss was $4.4 million and in the parallel quarter, it had been $5.4 million.
For the year 2005, revenue reached $195.7 million, down from $201.5 million in 2004. But on the upside, Alvarion announced an increase in WiMax product sales, which reached $10 million in the last quarter.
"Taking into account a very large deployment by Alvarion's largest customer in 2004, revenues from Broadband Wireless Access solutions, including BreezeMAX, Alvarion's flagship WiMAX platform, increased by 20% in 2005 over 2004," the company wrote.
Its loss for the year was $13.6 million, or 23 cents per share, against $900,000 profit in 2004.
In the first quarter of 2006 Alvarion expects to achieve $46-51 million in sales, but to stay in the red. It is looking at a pro forma loss of 3 to 6 cents per share. Wall Street has been expecting $50.4 million sales and a loss of 2 cents per share.
What about some black ink? Alvarion expects to regain that territory during 2006, when sales reach $55-60 million per quarter. Ahead of the third quarter, investors may expect to see signs of it breaking even.
The company attributes the decline to a single large deployment in the corresponding quarter. It posted a quarterly loss of $3.8 million.
Amir Keidan 8 Feb 06 10:24
Alvarion Ltd. (Nasdaq: ALVR; TASE: ALVR), which develops and manufactures broadband wireless network equipment, published its financial report for the fourth quarter of 2005 and the year as a whole this morning. The company posted $46.5 million revenue for the fourth quarter of 2005, 3% more than for the preceding quarter, but 17% less than for the corresponding quarter of 2004. Alvarion attributed most of the decline in revenue to “higher revenue contribution from one large customer during the fourth quarter of 2004”, in which the company posted $55.9 million revenue.
After deducting one-time expenses, Alvarion posted a loss of $3.8 million, or $0.06 per share, for the fourth quarter. Analysts had forecast a loss of $0.05 per share. Alvarion posted a loss of $5.4 million, or $0.08 per share, for the corresponding quarter of 2004, and $4.4 million, or $0.07, for the third quarter of 2005.
Alvarion posted $195.7 million revenue in 2005, 2.8% less than the $201.5 million posted in 2004. The company posted a non-GAAP net loss of $7.8 million, or $0.13 per share, in 2005, compared with a net profit of $15.1 million, or $0.24 per share, in 2004.
Alvarion said, “Taking into account a very large deployment by Alvarion's largest customer in 2004, revenues from Broadband Wireless Access solutions, including BreezeMAX, Alvarion's flagship WiMAX platform, increased by 20% in 2005 over 2004.”
BreezeMAX sales accounted for 21.5% of total sales in the fourth quarter, amounting to $10 million.
Published by Globes [online], Israel business news - www.globes.co.il - on February 8, 2006
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