Shares of leading IT consulting company, Zanett, Inc. (Nasdaq: ZANE) soared more than 100 percent from yesterday’s close after the company announced it set an in-house corporate record for contracts signed in a single quarter since the company was founded more than a decade ago.
Posts Tagged ‘telecom’
The Chinese telecomm industry leader, Telestone Technologies Corporation (Nasdaq: TSTC) , announced Tuesday that it’s Wireless Fiber Distribution System (WFDS™) passed all testing procedures of the U.S. Federal Communications Commission (FCC), including all of the existing 2G and 3G systems in the U.S. The announcement Tuesday boosted share prices 31.4 percent to a high of $11.15 from Monday’s closing price of $8.48.
The company’s proprietary Wireless Fiber Distribution System, which provides for indoor multi-services access networks, had a successful debut at the April 2009 CTIA trade show in Las Vegas. Following the trade show, the company immediately began working towards FCC compliance. To achieve this, Telestone developed a team comprised of corporate-level officers, R&D and marketing personnel, as well a partner in the United States.
Last month, the WFDS technology passed all FCC required testing procedures and Telestone was given the green light to market the product in the United States, as well as Canada, and Central and South America. The FCC certification is a substantial achievement for Telestone’s efforts to gain market share in North and South America.
Mr. Daqing Han, Chairman and CEO of Telestone, commented, “The certification of Telestone’s WFDS(TM) technology by the FCC has removed the final hurdle for us to effectively launch our marketing initiatives throughout the Americas. In the coming months, we expect to secure new contracts in the U.S. from telecommunication carriers and through our local partners while expanding our reach to countries in Latin America. Diversifying our revenue base as we move into 2010 is an important goal and we expect positive margin enhancements through increased WFDS(TM) sales.”
Industry analysts believe Telestone Technologies is poised for substantial growth in the coming years. The Chinese government has announced it will spend $70 billion over the next three years on 3G initiatives, this, coupled with Telestone’s impressive goals to increase the company’s domestic market share from 5 percent to 33 percent suggests the company plans to capture a sizable share of the government funds allocated for wireless development.
Shares of mobile infrastructure equipment maker Starent Networks (Nasdaq: STAR) soared nearly 19 percent in morning trading after telecommunications giant Cisco Systems, Inc. (Nasdaq: CSCO) announced it would acquire Starent for $2.9 billion to strengthen its high-speed wireless services business. Cisco will pay a 20 percent premium, or $35 a share in cash for Starent.
The deal is expected to close in the first half of CY2010. Cisco anticipates the acquisition will hurt earnings for fiscal years 2010 and 2011, but believes it will add to its bottom line in fiscal 2012.
Starent Networks marks the second multi-billion dollar deal for Cisco in less than three weeks. It follows the company’s Oct. 1 announcement that it plans to buy video conferencing equipment maker Tandberg for $3 billion.
“We are very pleased that Starent Networks will be joining the Cisco team, and we believe their products and engineering talent will greatly benefit our Service Provider customers as they build out their Mobile Internet offerings,” said Cisco Chief Executive Officer John Chambers in a statement.
Starent makes network equipment that fits between the radio access network and the core network of mobile phone service providers that include Sprint and Verizon Wireless. Cisco said there was some overlap in their products, but that their offerings would for most part be complementary.
After the deal closes, Starent will become part of Cisco’s service provider business, but as a new Mobile Internet Technology Group, headed by current Starent CEO Ashraf Dahod, who stands to gain substantially from the acquisition. As of Starent’s proxy filing in January, Dahod owned 6.9 million shares. At Cisco’s proposed price of $35 a share, Dahod’s stake would be worth approximately $241 million today.
The acquisition of Starent has raised some red flags and is currently being investigated by Levi & Korsinsky, LLP, for possible breaches of fiduciary duty and other violations of state law. For the year ending December 31, 2008, the Company reported revenues of $254,076,000 and net income of $60,524,000 as compared to revenues of $145,797,000 and net income of $5,485,000 for the year ended December 31, 2007.
The investigation looks into whether Starent’s Board of Directors breached their fiduciary duties to Starent shareholders by agreeing to sell the Company at an unfair price.
Shares of communication products maker, Zoom Technologies, Inc.(NASDAQ: ZOOM) were up as much as 140 percent in morning trading Monday from after the company announced second quarter financials for Gold Lion Holdings, a leading Chinese mobile phone manufacturer that Zoom acquired earlier this month.
For the second quarter of 2009, Gold Lion more than tripled its revenues to $53.1 million, compared to the same period last year. Furthermore, second quarter revenues were up 84 percent sequentially. The substantial revenue growth is due in large part to a significant order from one of Gold Lion’s existing customers.
“We are most pleased to report these outstanding quarterly results following the recently announced and shareholder approved transaction with Zoom Technologies,” said Lei Gu, Chairman and Chief Executive Officer of Gold Lion. “We believe these results reflect the burgeoning mobile telecommunications business in China and our ability to drive revenues and profit in this market.”
At a special meeting on September 8, shareholders of Zoom Technologies approved the acquisition of Gold Lion Holdings. The deal is expected to close by the end of September. Under the terms of the acquisition, Zoom shareholders will hold shares in two publicly traded companies, a vertically integrated China-based manufacturer of mobile telecommunication devices called Leimone United, Inc., and its US operating company Zoom Telephonics, which will retain substantially all of Zoom’s assets, liabilities, and current operations prior to the acquisition.
Revenues weren’t the only highlight in the Gold Lion’s second quarter results. The company reported a 147 percent increase in gross profit, and a $200,000 decline in operating expenses compared to the same period last year. Gross profit as a percentage of revenue, however dipped to 5.95 percent, from 10.95 percent in the same period a year ago, primarily because of low gross margins related to a significant order the company received during the quarter.
“These results further demonstrate the value of the transaction we expect to close in September,” said Zoom’s Chairman and CEO, Mr. Frank Manning. “The mobile phone market in China is growing rapidly, and we believe Gold Lion is well-positioned to benefit from this growth.”
Shares of network equipment maker ADC Telecommunications (NASDAQ: ADCT) jumped nearly 25 percent in morning trading on Wednesday after the company raised its earnings forecast for the July quarter and said it plans to cut more costs by expanding its global restructuring.
ADC said it expects third-quarter per-share earnings of between $0.05 and $0.10 on revenue of around $280 million, which is higher than the company’s previously forecasted range of a loss of $0.04 per share and earnings of $0.04 cents a share, on revenue in the range of $265 million and $290 million.
“Today’s announcement is a reflection of our ongoing strategic commitment to managing through the global recession, taking actions to transform our business and strengthening our competitive position,” Chief Executive Robert E. Switz said in a statement.
The better-than-previously expected projections were largely due to reducing the company’s workforce by 400 jobs, compared to the 100-130 layoffs originally stated. In June, ADC announced plans to cut jobs in Europe, the Middle East and Africa. On Wednesday, the company said it has increased the downsizing to include the United States, Latin America and Asia.
The new total represents about 4 percent of ADC’s total workforce, and is part of a company-wide restructuring plan that will cost the company between $24 million and $34 million.
The company, which has been hit hard by the recession, suffered a loss of $0.11 per share for the quarter ending May 1, compared to earnings of $0.14 per share for the same quarter last year.
ADC said in a statement that the efforts made over the past year to realign business operations are expected to continue improving the Minnesota-based company’s near term financial performance as well as increase long-term earnings potential.