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Routing

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

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.
http://www.lightreading.com/do...

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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