On Monday, the Ceragon Networks Ltd. (Nasdaq: CRNT; TASE:CRNT) share price jumped over 20%, with a high Tel Aviv Stock Exchange trade turnover, although it fell back 5% yesterday on profit taking. The share was closing the arbitrage gap with New York, opened in the past few days. The share price has risen 130% in the past six months, to a market cap of $215 million. At the same time, prices are still more than 70% lower than they were five years ago.
This recent hike is due to the company's announcement last week that it had been chosen by a leading, Tier-1 US communications operator as its primary wireless backhaul provider, in order to support densification and optimization of its mobile network. The first orders for Ceragon's IP-20 solution have already been received during the fourth quarter and total over $4 million.
Ceragon provides high-capacity wireless solutions for communications between base stations and the network's primary switch. "We are delighted to partner with the operator to support its network strategy," said Ceragon CEO and President Ira Palti. "Our IP-20 platform is highly deployed worldwide. We look forward to a successful long term partnership with the client."
Ceragon is expected to report its third quarter financial results on Monday, November 14. In the second quarter, it reported $70 million revenue, 26% down from the corresponding quarter in 2015 and 17% up from the first quarter in 2016.
Its operating profit in the second quarter was $4 million, compared with $5.9 million in the corresponding quarter last year and $1.2 million in the previous quarter. Overall, Ceragon reported only a symbolic $100,000 profit (on a GAAP basis) in the second quarter, compared with a $1.3 million profit in the corresponding quarter and a $400,000 loss in the first quarter of 2016.
The report from Thursday joins the company's announcement in June, when Ceragon reported orders totaling almost $40 million from three mobile telecommunications operators in India. It has already recognized some of the revenue from these orders and will recognize the rest in the next quarters.
Published by Globes [online], Israel business news - www.globes-online.com - on October 26, 2016
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