The upcoming trigger for Orckit will come this Friday, with the publication by Japanese company KDDI Corp of its results for the second quarter. It is also expected to unveil its roll-out and investment plan for the coming year, which will give an indication of the chances that Orckit’s subsidiary Corrigent Systems could win more orders from KDDI after the freeze at the beginning of 2006.
Orckit will publish its own second quarter results next Tuesday. These will be in line with market expectations, because quarterly sales are already in last quarter's deferred sales item. On the other hand, it is highly likely that the lack of new orders from KDDI could require Orckit to once again revise downwards its guidance by the end of the year, and I think its share price already includes such a scenario.
I nevertheless hope it will disclose more information on the potential new contracts in 2007. The stock market usually looks several months forward, and if 2007 looks like a year of renewed orders from KDDI plus new contracts for Orckit, the share will deliver a powerful response before this year is over.
Published originally by Globes [online], Israel business news - www.globes.co.il
© Copyright of Globes Publisher Itonut (1983) Ltd. 2006. Republished on Seeking Alpha with full permission.