The Ticker / Tel Aviv Shares Higher Despite Greek ‘No’ Vote

Allot tumbles on disappointing 2Q forecast; Silicom says quarterly sales will fall short of estimates, Raval shares rise after winning $115 million in contracts.

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Inside the Tel Aviv Stock Exchange.
Inside the Tel Aviv Stock Exchange.Credit: Bloomberg

Tel Aviv shares higher despite Greek ‘no’ vote

The Tel Aviv Stock Exchange on Monday shrugged off a global stock market slump in the wake of the Greek “no” vote in Sunday’s referendum. The TA-25 benchmark index rose 0.33% to end at 1,658.64 points, while the TA-100 edged 0.08% higher to 1,425.74, as 1.02 billion shekels ($270.2 million) in shares changed hands. “The referendum results will bring the two sides to the negotiating table and quickly bring a solution that keeps Greece in the [euro] bloc,” said Top Alpha, in a note to investors. Bank stocks were higher, with Leumi and Hapoalim both up about 1.1% at 15.92 and 20.52 shekels, respectively. Technology stocks were down, led by profit warnings at Allot Communications and Silicom. In the fixed-income market, the government’s shekels bond due in August 2025 rose 0.91%, trimming its yield to 2.56%. Its inflation-indexed bond due in September 2023 edged 0.07% higher to a yield of 0.54%. The euro was weaker against shekel, losing 0.5% to a Bank of Israel rate of 4.1638 shekels. The dollar gained almost 0.2% to 3.7760.

Allot tumbles on disappointing 2Q forecast

Allot Communications shares tumbled on Monday after the company forecast disappointing second-quarter results. Based on preliminary estimates, the maker of cellphone-network technology said it expected revenue to be in the range of $21 million to $22 million, and to show a net operating loss. That compared with estimates by Capital IQ Consensus for earnings of 7 cents a share and revenues of $30.4 million. “We are disappointed by the second-quarter preliminary results and attribute this weakness to lower bookings in the first quarter, as well as delays in closing certain deals during the second quarter,” said CEO Andrei Elefant. On the positive side, Allot said it had won three “strategic” contracts totaling about $8 million, which would be booked in the second half of the year. The company added it now expected full-year 2015 revenues to range between $100 million and $105 million. Shares of Allot, which did not say when it would report final results for the quarter, fell 16.2% to close at 22.37 shekels ($5.94).

Cellphone-network technology maker Allot Communications' shares tumbled on Monday.Credit: AP

Silicom says quarterly sales to fall short of estimates

Silicom, a maker of network-server technology, said Monday its second-quarter revenues would be less than previously forecast, sending its share into a tailspin. The company said sales would likely be in the range of $16.8 million to $17.2 million, below the company’s previous projections. But Silicom was more bullish on the third quarter, saying revenues would range from $18 million to $19 million, representing both sequential and year-over-year growth. “Our shortfall for the second quarter reflects a softening of demand from some of our customers,” said CEO Shaike Orbach. “We expect that the second quarter will be the low point of our revenues for the year, and believe the strategy that has worked extremely well for us for many years will continue to prove itself in the future.” Shares of Silicom, which will release its second-quarter results July 22, dropped 21.1% to finish at 107.80 shekels ($28.62).

Raval shares rise after winning $115 million in contracts

Raval ICS, a maker of fuel tank venting systems, said Monday it won orders worth 104 million euros ($115 million) from automakers, including Volkswagen, Daimler and Opel and Tier 1 parts makers, sending its shares sharply higher. The contracts run for seven years, starting from 2016, and will bring its orders backlog to a record 1.13 billion euros, said the company, which uses a proprietary modular system. The latest contracts follow some 100 million euros in orders from Volkswagen, Daimler and BMW that Raval won in May. Shares of Raval, which is 51% owned by Kibbutz Revivim and 11% by the private equity fund FIMI, closed up 5.2% at 6.90 shekels ($1.88).