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Canaccord reiterates hold rating for EXFO

Canaccord reiterates hold rating for EXFO
Despite the lower revenues, EXFO realized a quarterly net profit of US$563,000

Canaccord Genuity analysts reiterated their ‘hold’ rating for EXFO (NASDAQ:EXFO) in a note issued to investors on June 24, maintaining a US$3.50 target price, which is 8.0 % higher than the stock’s current trading price of US$3.26.

On Tuesday, EXFO reported revenues of US$57.8 million for the third quarter of its fiscal year 2015 or 9.5% lower than the US$63.9 million reported in the same quarter of 2014.

The Quebec provider of test solutions and service assurance for network operators and equipment manufacturers in the telecom industry, during its fiscal quarter ending on May 31, secured orders worth for US$59.2 million compared to US$66.5 million US dollars in the third quarter of fiscal 2014.

EXFO argues that its sales have suffered from a negative impact of the US dollar, even though it had more bookings for services, reaching a value of US$66.5 million in the third quarter of fiscal 2014 compared to US$61.8 million in the same period last year and US$58.7 million in the second quarter of 2014. The company's book-to-bill ratio was 1.04 in the third quarter of 2014 said the company in a statement.

Despite the lower revenues, EXFO realized a quarterly net profit of US$563,000. At the end of the third quarter of its fiscal 2014, EXFO had reported a net profit of US$1.7 million.

During the third quarter of fiscal 2014, EXFO acquired the assets of ByteSphere, a Boston-area software company specializing in global IT management and network monitoring solutions, extending service assurance.

EXFO also recently bought Finnish customer analytics provider Aito Technologies in an asset purchase deal, intending to combine the latter’s analytics software with its own wireless product portfolio to provide mobile operators with heightened, end-to-end visibility of their 3G and 4G/LTE networks.

 "I am delighted with our improved market position in the wireless industry, both through the recent acquisitions of ByteSphere and Aito Technologies but also with several recently introduced solutions. All these initiatives have greatly elevated EXFO's strategic relevance in the wireless industry as reflected by three recent contract wins, two of which occurred with tier-1 network operators after the quarter-end," said " EXFO’s chairman, president and CEO, Germain Lamonde.

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