Comverse Technology Inc. (Nasdaq: CMVT) reported revenue and net profit growth for its second fiscal quarter of 2012, which ended in July.
Revenue rose to $383.7 million for the second fiscal quarter from $377 million for the corresponding fiscal quarter of 2011. GAAP-based net loss fell to $274,000 ($0.00 per share) for the second quarter from $39.7 million for the corresponding quarter, and non-GAAP net profit rose to $24.2 million ($0.11 per share) from $21 million.
Subsidiary Comverse Inc.'s revenue fell to $171.2 million for the second fiscal quarter from $182.1 million for the corresponding fiscal quarter, but its profit rose to $21 million from $16.8 million. The company's BSS (business support solutions) revenue fell to $69.1 million for the second fiscal quarter from $85.5 million for the corresponding fiscal quarter, but its VAS (value-added services) revenue rose to $91.3 million from $84.1 million.
Comverse Technology chairman and CEO Charles Burdick said, "We have made excellent progress toward separating the three Comverse Technology operating companies from common ownership. The previously-announced sale of our majority-owned subsidiary Starhome BV is expected to close by mid-October, yielding proceeds of approximately $37.4 million, the Comverse Technology holding company plans to be acquired by our majority-owned subsidiary Verint Systems Inc. (Nasdaq: VRNT) in early 2013 in a stock-for-stock transaction announced last month, and we remain on track to spin-off our Comverse Inc. subsidiary as a well-capitalized publicly-traded company, with distribution targeted for October 31. We will be holding a shareholder meeting on October 10 to approve the spin-off of Comverse. We think these transactions represent the most cost and tax efficient way to distribute Comverse and Verint to our shareholders, and put both companies in the best position to maximize value."
Burdick also noted the appointment of Philippe Tartavull as CEO and Tom Sabol as CFO of Comverse, to prepare it for life as a public company. He added, "In the second quarter Comverse saw sequential revenue and cash flow performance improvement, positive operating income and we expect to generate positive cash flow from operations in the second half of fiscal 2012, along with modest bookings growth for the full fiscal year. In addition, Verint, which announced second quarter results on September 5, continues to achieve solid growth and profitability."
Comverse Technology's share price rose 6.4% on Nasdaq on Friday, following the publication of the financial report, to $6.38, giving a market cap of $1.4 billion.
Published by Globes [online], Israel business news - www.globes-online.com - on September 9, 2012
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