WiMAX maker Alvarion Ltd. (Nasdaq: ALVR; TASE: ALVR) today published its financial report for the fourth quarter and full-year of 2008. The company swung into a net loss for the quarter, after Alvarion was unable to recognize $2.4 million in sales to bankrupt Nortel Networks Corp. (NYSE; TSX: NT). Nortel also abrogated the companies' joint mobile WiMAX agreement last week
Alvarion posted $70.1 million revenue for the fourth quarter of 2008, 6% more than the $66.3 million for the corresponding quarter of 2007, but down 6% on the $74.3 million for the preceding quarter. The GAAP-based net loss was $4.8 million ($0.08 per share), compared with a net profit of $803,000 for the preceding quarter and net profit of $4.1 million for the corresponding quarter. Non-GAAP net profit was $119,000 (zero per share), down from net profit of $3.1 million for the corresponding quarter.
The fourth quarter results were at the lower limit of the company's guidance. The results were also slightly below the analysts' consensus of non-GAAP earnings per share of $0.01 on $71.4 million revenue.
Alvarion's share fell 1% in after-hours trading on Nasdaq to $3.34, but it rose 0.2% in early trading on the TASE today to NIS 13.54.
For the year as a whole, Alvarion posted a record $281.3 million revenue, up 19% on the $236.6 million revenue in 2007. WiMAX revenue rose to a record $171 million, about 61% of total 2008 revenue, compared with 52% of total revenue of $124 million in 2007.
The company posted a net loss of $5.5 million ($0.09 per share) in 2008, compared with a net profit of $7.1 million in 2007. Non-GAAP net profit was $6.9 million ($0.11 per share), down from $8.8 million in 2007.
The company attributed most of the decline in the gross margin in 2008 to a shift in product mix, as well as unfavorable foreign currency translation in January-September.
Alvarion had $141 million in cash reserves at the end of December, after using $5 million to repurchase shares during the fourth quarter.
Looking forward, Alvarion's first quarter guidance predicts a GAAP-based earnings per share of between minus $0.05 to plus $0.01 and non-GAAP earnings per share of between minus $0.02 to plus $0.04 on $65-73 million revenue. The analysts' consensus is non-GAAP earnings per share of $0.01 on $68.9 million revenue.
Alvarion president and CEO Tzvika Friedman said, "There are many well-funded operators, including Tier-1 and Tier-2 carriers, around the globe embracing rather than resisting change and planning to use WiMAX to bolster their competitive advantage. While decision cycles may lengthen and funding will remain an issue, we believe opportunities for a company our size remain abundant."
Friedman added, “Our immediate challenge is to continue to win major deals while supporting existing customers’ rollout plans, and to take a larger share of the available business in a very competitive environment. We are, and intend to remain, among a handful of top end-to-end solution providers that will win the bulk of the WiMAX business in years to come. Meanwhile, we will be stretching farther to be as efficient as possible. Our goal for 2009 is to improve profitability for the year even as growth slows temporarily due global economic conditions.”
Published by Globes [online], Israel business news - www.globes-online.com - on February 4, 2009
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