Comtech Q4 profit beats Street view; shares rise

BANGALORE, INDIA: Telecom equipment maker, Comtech Telecommunications Corp posted a fourth-quarter profit that beat Wall Street expectations, helped by the acquisition of communication-equipment maker Radyne Corp.

The company said its telecommunications transmission and RF microwave amplifiers segments both benifited from the acquisition.

However, sales of its mobile data communications equipment decreased due to a shift of revenue to fiscal 2010.

"We believe that the fourth quarter may represent a bottoming out and that cost reductions implemented in fiscal 2009 will continue to benefit us as we focus on important commercial and U.S. government opportunities that we see ahead," chief executive Fred Kornberg said in a statement.

Comtech had in August announced cost reduction actions related to two small product lines.

Kornberg also said the company had about $485.5 million in cash that could be used for acquisitions.

Backlog at the end of the quarter was $549.8 million, a near three-fold rise from a year earlier, but bookings for the period fell 43 per cent to $80.8 million.

"They have a big backlog in their mobile data segment which provides good visibility on their military business over the next twelve months, the backlog in the rest of the business looks less impressive," said Stephens Inc analyst Timothy Quillin.

The company's mobile data unit supplies movement tracking system to the U.S. Army.

Net income for the quarter fell to $6.2 million, or 21 cents per share, from $17 million, or 61 cents per share, a year earlier.

Revenue fell by about 4 per cent to $122 million.

Excluding stock-based compensation expense, the company earned 26 cents a share.

Analysts expected earnings of 18 cents a share, excluding exceptional items, on revenue of $127.2 million, according to Reuters Estimates.

Shares of Melville, New York-based Comtech were up about 4 per cent at $34.45 in trading after the bell.