Reuters: Regulatory News: UPDATE 1-Mobile internet demand boosts Allot profit

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UPDATE 1-Mobile internet demand boosts Allot profit Jul 31st 2012, 14:10 Tue Jul 31, 2012 10:10am EDT * Q2 EPS ex-items $0.15 vs $0.14 forecast * Q2 revenue up 43 percent to $26.4 million * Rising mobile data traffic driving growth By Steven Scheer JERUSALEM, July 31 (Reuters) - Allot Communications , whose technology allows telecoms operators to monitor and allocate bandwidth, posted a forecast-beating rise in quarterly profit as revenues rose over 40 percent, helped by surging demand for fast internet on mobile devices. Traditional telcos and mobile operators are experiencing high demand for bandwidth due to strong sales of iPhones, iPads and Android-based mobile phones and devices, but providers are seeing revenue declining as unlimited data plans have grown more popular. "Allot is benefiting from growth in mobile data and growth in data traffic in general," Nachum Falek, Allot's chief financial officer, told Reuters on Tuesday, adding that much of the rise in investment in expanding networks' bandwidth comes from streaming movies and video clips. Video, Falek said, will likely account for 60 to 70 percent of traffic in the next few years, up from 42 percent currently. Allot's equipment allows telecom providers to monitor data traffic and allocate bandwidth to where it's needed most - users streaming video at the expense of a slightly longer wait for another customer expecting a large file via email, for example. "You want to see streaming video without buffering but you don't mind getting an email a second later," Falek said. Europe is Allot's largest market, where many of the biggest mobile operators are its customers, while it also sells to Asia and Latin America. Allot sees the United States as a key growth driver following a U.S. court ruling two years ago that allowed Internet service providers to slow traffic to sites such as YouTube or Hulu. "The United States is a huge market in terms of opportunity," Falek said. Allot earned 15 cents per diluted share excluding one-time items in the second quarter, compared with 10 cents a year earlier. Revenue rose 43 percent to $26.4 million. The Israeli company was forecast to earn 14 cents a share on revenue of $25 million, according to Thomson Reuters I/B/E/S. Allot also said it was buying Oversi Networks, a provider of media caching for Internet video, for $16 million in cash. It was the second acquisition for Allot this year after buying Ortiva Wireless in May. The deal is expected to close during the third quarter. Oversi, an Israeli start-up, is expected to contribute $2 million to Allot's quarterly revenue and impact earnings per share by 2 cents in the fourth quarter but break even by the first quarter of 2013, Allot said. Allot's Tel Aviv-listed shares closed 2.7 percent lower, while its Nasdaq shares were down 10.8 percent at $22.01 in morning trading. Link this Share this Digg this Email Reprints

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