February 4, 2009 / 5:04 PM / 9 years ago

UPDATE 2-Alvarion posts Q4 loss on restructuring, Nortel

* Q4 non-GAAP earnings $119,000

* Q4 revenue up 6 pct to $70 mln

* Sees Q1 non-GAAP EPS at $0.02 loss to $0.04 profit

* Sees Q1 non-GAAP revenue at $65-$73 mln

* Shares gain in New York

TEL AVIV, Feb 4 (Reuters) - Alvarion Ltd ALVR.O, an Israeli maker of wireless telecom equipment, swung to a fourth-quarter loss due to a restructuring charge and Nortel Network’s NT.TO decision to end a joint WiMAX agreement.

Alvarion ALVR.TA posted a quarterly loss of $4.8 million, or 8 cents a share, on Wednesday, compared with a profit of $12.4 million, or 19 cents per diluted share, a year earlier.

Excluding a restructuring charge of $3.4 million and other one-time items, the company had net income of $119,000, down from $3.1 million, or 5 cents a share, a year earlier.

Revenue rose 6 percent to $70.1 million.

The results were in line with a warning the company had issued last week after Nortel filed for bankruptcy and ended an agreement with Alvarion. [ID:nN29310463]

This resulted in Alvarion being unable to recognise $2.4 million of revenue from the sale of products to Nortel in the fourth quarter.

Its Nasdaq-listed shares were up 0.6 percent at $3.39 in late morning trade, off a year-low of $2.54 in November.

“It would have been a light quarter even if it was not for Nortel, but investors were bracing for that already,” Daniel Meron, an analyst at RBC Capital Markets, wrote in a note to clients.

“While it wasn’t a smooth ride for Alvarion in 2008, we believe the company ended the year with good results, all things considered,” he added.

Alvarion forecast first-quarter revenue of $65-$73 million, while non-GAAP results were expected to range between a loss of 2 cents per share to a profit of 4 cents. GAAP results were forecast to range from a 5 cents per share loss to earnings of 1 cent.

Alvarion is forecast by analysts to earn 1 cent a share in the first quarter on revenue of $70.1 million, according to Reuters Estimates.

Meron, who rates the company as “sector perform” with a target price of $6.00, said Alvarion has improved its position as “one of the major WiMAX players around” and he remains positive in the long run although the short-term is uncertain.

He predicts a 7 percent revenue rise in 2009 to $302 million after a 19 percent increase in 2008 and a 64 percent jump in earnings per share to 18 cents.

“Our goal for 2009 is to improve profitability for the year even as growth slows temporarily due (to) global economic conditions, Tzvika Friedman, president and chief executive of Alvarion, said in a statement.”

Despite Nortel’s decision to abandon its WiMAX wireless technology business as it restructures in bankruptcy protection, Alvarion is betting on WiMax — a type of fast, next generation, long-range wireless technology. Intel (INTC.O) and Sprint Nextel S.M are also big supporters of WiMAX.

“In 2008, WiMAX continued to exhibit strong demand, despite concerns over a spreading global recession,” said Friedman. “We are further encouraged by the fact that we are entering 2009 with a backlog of business twice as large as we had a year ago. Our non-WiMAX business was stable in 2008 and we expect it to remain so in 2009.”

He noted that a number of Tier 1 and Tier 2 carriers worldwide planning to implement 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 said.

Reporting by Tova Cohen and Steven Scheer; editing by Simon Jessop

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