Novatel up ahead of 1Q report after strong result from rival
NEW YORK—Shares of Novatel Wireless Inc. climbed Thursday ahead of the wireless modem maker's first-quarter results, scheduled for after the closing bell, as investors seemed reassured by a strong showing from rival Sierra Wireless earlier in the week.
Sierra's first-quarter results were better than expected, and its profit and sales forecast for the current quarter also surpassed Wall Street's estimates.
Banc of America Securities analyst Tim Long expects Novatel's results to meet the company's lowered outlook in mid-April, he wrote in a note to clients last week. The company lowered its revenue forecast to $91 million from $110 million, and attributed about $10 million of the shortfall to a product delay by an important U.K. customer. The warning prompted several downgrades and sent Novatel's shares to a multiyear low at the time.
Analysts, on average, expect Novatel to post a profit of 13 cents per share on sales of $90.9 million, according to a poll by Thomson Financial.
On Thursday, San Diego-based Novatel's shares rose 22 cents, or 2.5 percent, to close at $9.14. The stock is still down about 45 percent since the start of the year.
Shares of Canada's Sierra Wireless rose 45 cents to $19.15. The stock has traded in the 52-week range of $11.98 and $28.10.
