Comverse Technology Inc. (Pink Sheets: CMVT.PK) has published its consolidated preliminary unaudited financial reports for the fourth fiscal quarter of 2006 and the year as a whole. The company’s fiscal year ends on January 31. Despite 33% growth in revenue to $1.59 billion for the year, the company posted an operating loss on a GAAP basis. The company posted an operating profit only for the first fiscal quarter of 2006.
The company said it recorded stock-based compensation expense and related withholding and income tax effects of about $314 million for the restatement period (January 1, 1991 through October 31, 2005). The company’s investigation into the options backdating affair cost $52.6 million during 2006, including $15.4 million for the fourth fiscal quarter.
Comverse Technology posted an operating loss on a GAAP basis of $39.9 million in 2006, but a non-GAAP operating profit of $136.3 million (8.6% of revenue). The operating loss on a GAAP basis was because of the expenses for the stock option grants.
Comverse Technology posted $415 million revenue for the fourth quarter, less than the analysts’ consensus of $421.4 million. Operating loss on a GAAP basis was $18.2 million, but a non-GAAP operating profit of $26.6 million (6.4% of revenue).
The company has cash and short-term investments worth $1.88 billion at the end of its 2006 fiscal year in January, 10.6% less than at the end of its 2005 fiscal year. The company acquired two companies last year: VoIP developer Netcentrix for $160 million, and self-service telecommunications applications developer Netonomy for $19 million.
Comverse Technology subsidiaries include Comverse, Comverse Networking Solutions (CNS), Verint Systems Inc. (Pink Sheets: VRNT.PK), Ulticom Inc. (Pink Sheets: ULCM.PK), and Starhome. The group had 7,450 employees at the end of January. Comverse Technology has a market cap of $4.2 billion. The share fell 3.1% on Friday, after the publication of its preliminary financials.
Published by Globes [online], Israel business news - www.globes.co.il - on March 25, 2007
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