The Ticker: Wireless Carrier Partner Shares Surge 11%

Mellanox jumps in early Nasdaq trading ■ Bank Leumi raises dividend in 3rd quarter ■ Frutarom eyes $2.25 billion in sales by 2020 ■ TASE’s leading indexes up in Tuesday trading

Partner CEO Itzik Benbenishti gives a lecture at a media event in Tel Aviv on September 16, 2017.
Ofer Vaknin

Partner shares surge by 11%

Partner Communications, Israel’s second-largest wireless carrier, reported higher third-quarter profits Tuesday that beat estimates, though revenue slipped as the company lost subscribers. Partner earned 54 million shekels ($15 million) in the quarter, up from 19 million shekels a year earlier and above a forecast of 29 million shekels in a Reuters poll of analysts. Shares surged 11.23% to 20.41 shekels in Tuesday Tel Aviv trading. Partner’s quarterly operating expenses dropped 16% to 477 million shekels and finance costs fell by half to 15 million shekels. Revenue dipped 3% to 826 million shekels. The subscriber base fell by 16,000 a year earlier, to 2.68 million. Partner’s revenue and profit have plunged in the wake of a 2012 reform that opened the market to new players and forced steep price cuts. It is seeking new revenue streams and is making a push to become an integrated multiservice telecoms group. The company said about 30,000 consumers have joined Partner TV, an internet-based TV service offering cut-rate plans, launched in June in partnership with Netflix. (Reuters)

Mellanox shares jump in early Nasdaq trading after Starboard Value buys stake

Shares of Yokne’am-based chip maker Mellanox Technologies surged at the start of trade on the Nasdaq Tuesday, after activist hedge fund Starboard Value LP bought a 10.7% stake to influence strategy. Shares were up 11.2% at $56.75 in late morning trading. Mellanox said it welcomed dialogue with shareholders after Starboard disclosed its purchase, adding there was a “growing disparity” between the chipmaker’s margins, growth and stock price performance compared to its peer group. “Tremendous value can be created through operational improvements or other strategic alternatives,” Starboard said in a filing with the U.S. Securities and Exchange Commission late Monday. In particular, Starboard is concerned that Mellanox rejected a potential merger with rival Marvell Technology. Starboard said Marvell had expressed interest in discussing a “potential strategic transaction” but Mellanox declined to enter into talks. Peter Feld, a principal of Starboard Value, is a director at Marvell. Mellanox stock had risen 25% this year through Monday, compared with Marvell’s 56% rally. Mellanox said in a statement Tuesday that it “welcomes the input and investment” from all its shareholders. (Reuters and TheMarker)

Bank Leumi raises dividend as 3rd quarter profit exceeds forecasts

Bank Leumi, Israel’s second-largest lender, beat third-quarter net profit forecasts Tuesday and doubled its quarterly dividend payout rate to 40% of profit. Leumi earned 820 million shekels ($233 million) in the quarter, topping the 686 million shekels forecast by analysts in a Reuters poll. Earnings fell from 919 million shekels a year earlier, but that had been boosted by a 235 million shekels insurance reimbursement relating to a fine paid to U.S. authorities in a tax investigation. The bank raised its quarterly dividend payout to 40% of net profit and said it would distribute 328 million shekels for the third quarter. In March, Leumi adopted a dividend policy for the first time in six years, setting a payout ratio of 20%. Net interest income fell to 1.918 billion shekels from 1.97 billion shekels, hurt by a negative consumer price index. Credit loss expenses fell to 3 million shekels from 106 million shekels a year earlier. Leumi shares closed up 3.22% Tuesday at 19.54 shekels. (Reuters

Frutarom’s Q3 profit rises, eyes $2.25 billion in sales by 2020

Flavor and fine ingredients maker Frutarom Industries reported a 27% rise in third-quarter net profit to $40.8 million Tuesday. Sales rose 19.6% to a record $358.8 million, boosted by 10 acquisitions this year. Frutarom raised its 2020 sales target to $2.25 billion and an EBITDA margin from core businesses to 23%, from a previous target of at least $2 billion with an EBITDA margin of over 22% in its core businesses. CEO Ori Yehudai said the company raised its target after “examining our strong competitive position, accelerated rate of internal growth, our latest acquisitions, our pipeline for future acquisitions and the contribution of the streamlining and global procurement activity.” The share closed up 3.5% at 284.00 shekels ($80.45) in Tel Aviv. (Reuters and TheMarker)

TASE’s leading indexes up in Tuesday trading

The leading indexes on the Tel Aviv Stock Exchange closed generally up Tuesday. The benchmark TA-35 index and the broader TA-125 both gained 0.5%, closing at 1,417.31 points and 1,301.09 points respectively. Trading volume was 1.34 billion shekels ($380 million). The Banks-5 index rose 1.03% to 1,818.59, boosted by a 3.22% jump in shares of Bank Leumi after it released third-quarter earnings. (See that story and other earnings reports above). In other shares of note, Cellcom Israel, which will report earnings Wednesday, jumped 8.13% to 35.90 shekels while El Al rose 9.49% to 1.65 shekels. By contrast, shares of 3-D printed electronics company firm Nano Dimension plunged 9.68% to 2.75 shekels. (Uri Tomer)