Oscar Gruss & Co. has cut its target price for Radvision Ltd. (Nasdaq: RVSN; TASE: RVSN) to $7 from $8, while reiterating its "Hold" recommendation for the IP video conferencing call solutions developer, after Radvision published its financial report for the second quarter and issued its guidance for the third quarter, which was below analysts' expectations. Radvision's share fell 0.2% to $5.85 on Nasdaq on Friday, giving a market cap of $123 million.
Oscar Gruss analyst Jonathan Kreizman noted that Radvision's lower guidance for the second half of 2008 implied that the company expected a rebound in business only in 2009. He also noted that the third quarter guidance was below the market consensus. "We continue to believe that it is going to take a while before Radvision will turn the corner. The increasing losses and potential acquisitions prevent us from viewing the large cash pile as a safety cushion," he concluded.
On Thursday, Radvision reported that it posted $20.8 million revenue for the second quarter, down from $24.7 million for the corresponding quarter of 2007. The company posted a GAAP-based net loss of $3.9 million ($0.19 per share) compared with a net profit of $3.6 million for the corresponding quarter. Non-GAAP net loss was $2.2 million ($0.10 per share) for the second quarter, compared with a net profit of $5 million for the corresponding quarter. The company had predicted a net loss of $3.6 million on $20.5 million revenue. The company's guidance for the third quarter predicts a net loss of $3.6 million on $21.5 million revenue.
Kreizman said that Radvision's second quarter revenue was slightly above Oscar Gruss' forecasts, and that non-GAAP earnings per share was $0.01 above the company's guidance. However, the company's third quarter guidance of $0.11 non-GAAP loss per share is $0.07 below the market consensus.
Kreizman has therefore cut his revenue forecast and raised his loss forecasts for Radvision to $0.11 non-GAAP loss per share on $21.5 million revenue for the third quarter from $0.08 non-GAAP loss per share. For the year as a whole, he now predicts non-GAAP loss per share of $0.37 on $84.4 million revenue, compared with his previous forecast of $0.33 non-GAAP loss per share on $84.6 million revenue.
Published by Globes [online], Israel business news - www.globes-online.com - on August 3, 2008
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