Redback Climbs on BellSouth News
Word from Redback Networks Inc. CEO Kevin DeNuccio that BellSouth likely will regain "10 percent" status as a customer was enough to drive the router vendor's stock up today. Redback was up $1.78 (11.7%) at $16.94 near closing time on Wall Street.
The tidbit was included in DeNuccio's presentation at a Lehman Brothers technology conference in San Francisco yesterday.
A spokesman confirms DeNuccio said this but adds that Redback isn't changing its December-quarter guidance. Analysts expect revenues of $77.3 million from the company, compared with $70.9 million for the third quarter, according to Reuters Research .
In the September quarter, the customers each representing 10 percent of Redback's revenues were AT&T Inc. (NYSE: T), BT Group plc (NYSE: BT; London: BTA), Telefónica SA (NYSE: TEF), and Türk Telekomunikasyon A.S. -- but no longer BellSouth. That sparked some concerns, especially considering at least one analyst was musing in June that BellSouth money might dry up a bit. (See Avici Down, Redback Less Down, Redback in Guidance Guessing Game , and Redback Shares Stumble.)
Beyond that, there was some nervousness early this year about how the AT&T merger might disrupt life for some BellSouth customers. BellSouth buys Redback's newer SmartEdge routers, but AT&T is still using the older SMS models. (See Will AT&T Value BellSouth's Vendors?)
— Craig Matsumoto, Senior Editor, Light Reading