Redback Climbs on BellSouth News

BellSouth Corp. (NYSE: BLS) is back!

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

COMMENTS Add Comment
Pete Baldwin 12/5/2012 | 3:32:58 AM
re: Redback Climbs on BellSouth News Before anyone asks ... yes, we did notice the Redback win in China yesterday.

It's just that the folks we talked to didn't think that was enough to boost the stock 15% (which is where it was earlier).

BellSouth, OTOH, seems like something investors would rally around. There's a whole clan of traders that seem to spring into action on any word about Redback and the RBOCs.
materialgirl 12/5/2012 | 3:32:47 AM
re: Redback Climbs on BellSouth News Analysts like profits. They probably assume that RBOC business has profits attached, while Chinese business may not.
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