Daily roundup / Liveperson falls on guidance cut
Given Imaging boosts operating profit, Pelephone workers organize, Bezeq's profits shrink, Israeli fashion predicted to suffer and Better Place sheds second Agassi brother.
Liveperson stock dives on guidance cut: Shares of Liveperson tumbled 19% on the Tel Aviv Stock Exchange on Wednesday after the technology firm's results for the third quarter disappointed, and its guidance for the fourth quarter of 2012 and the year fell short of the consensus. Why the guidance cut? The U.S. firm, which also listed in Tel Aviv last year, announced the acquisition of Engage Pty, a live-chat technology company located in Australia that will press on revenues and profit this year. Meanwhile, Liveperson said third-quarter revenues grew 18% from the year before to $39.7 million, but that was 3.4% less than analysts had forecast, according to Bloomberg.
Given Imaging didn't grow, but operating profit shot up: Med-tech company Given Imaging reported a slight 1.5% increase in third-quarter revenues to $45.4 million. But operating profit, excluding one-time items, shot up 57% year over year to $6.5 million, following an increase in gross margins. And why did its gross margins widen? Because margins on diagnostic systems ManoScan and Bravo increased, and the company could scale back its R&D spending by 25% after wrapping up clinical trials of its pill-camera for the colon. Given Imaging, which operates out of the Yokneam industrial zone, explains that the firm moved manufacturing from the United States to Israel. Given Imaging repeated its guidance for 2012: revenues in the range of $185-190 million.
Pelephone workers rumble on:The day the Bezeq group reported a big hit to profit thanks in no small part to its Pelephone mobile unit, organized workers at said mobile unit will be convening, ostensibly to bring information to workers who haven't joined the union yet. However, management views the meeting as a provocation and argues that the Histadrut umbrella union can't be declared representative of its workers because the Histadrut hasn't proved it has collected enough signatures from Pelephone workers.
Bezeq in black, but less of it: Apropos of the Bezeq group, the company on Wednesday admitted to netting a mere NIS 342 million in the third quarter of 2012, down 37% from NIS 550 million in the same period of 2011. All its divisions took hits because of mounting competition, as telecom analysts had predicted, but Pelephone, the wireless unit, was among the worst hit. Its profit shrank by 41% to NIS 154 million. Bezeq's consolidated revenue shed 15% year over year to NIS 2.49 billion in the quarter.
A quarter of clothing stores doomed, says BDI: Fashion is out of fashion, it seems. Market research firm Business Data Israel predicts that 25% of the clothing and footwear stores in Israel are in mortal danger of unraveling. The latest two are the relatively well-known companies Serigamish and Bonita, but they're just harbingers of a nasty trend, predicts BDI. The "risk index" of Israeli fashion retail has been rising for years, and rose by another 3% this year, says BDI. Israel has more than 4,500 clothing and footwear stores, 53% are individual stores and the rest are chain outlets. One reason for the accelerating implosion is competition from foreign chains, like American Eagle.
Tal Agassi dismissed from Better Place: A month after his brother's ouster as alpha dog at Better Place, younger sibling Tal Agassi is following Shai Agassi into the big world. Agassi the younger had been in charge of deploying the company's battery-charging globally and switching infrastructure for electric cars. Tal, 37, joined the firm shortly after its establishment. The firm says Tal is moving on because his primary job has been completed. But it is also true that Better Place will be replacing the systems deployed in Australia and Denmark. Another truth is that the company is scaling back its staff in Israel. Sister Dafna Agassi is still at the firm as VP of marketing.
With reporting by Haim Bior, Amitai Ziv, Adi Dovrat-Meseriitz, Oren Freund and Yoram Gabison