True, we are currently experiencing a dangerous period of profit warnings, but I still hope that I interpreted correctly the tremendous self-confidence displayed by Radvision CEO Boaz Raviv and CFO Tsipi Kagan at last week’s conference which was organized by KBRO Kaufman Brothers L.P. They will probably repeat the same super-optimistic presentation at Think Equity LLC’s annual conference in San Francisco later this week. Radvision is currently traded at $16.50, and the company will reach earnings per share of $1 in 2006, up from this year’s expected earnings per share of $0.82. It has more than $6 million in cash and it has no debts.
The most important thing for Radvision is the fact that it is a key technological anchor for several video communications giants. It has large contracts with Cisco, which sees itself becoming a video company in three years time. One of these contracts is for the supply of military equipment to the US Department of Defense, in partnership with Northrop Grumman Corp. (NYSE: NOC).
Radvision also has a major collaboration with Microsoft Corp (Nasdaq: MSFT), which together with Cisco is bringing video communications to every enterprise desktop, and not just those in conference rooms. In addition, the company is set to announce tomorrow a collaboration with another giant, IBM (NYSE: IBM), which will launch a new real time interpersonal communications software program called ‘Same Time 7.5,’ based on Lotus Notes software, with Radvision providing the video communications component. Radvision will attend tomorrow’s launch in New York and will take part in a panel together with IBM, Cisco, Dassault Systèmes (Nasdaq: DASTY), and Research In Motion Ltd. (Nasdaq: RIMM), marketer of the Blackberry wireless device.
There are those who predict a great future for 3G-based video communications, and Radvision is very active in this field, although at present, the efforts in this field are limited to the many trials conducted mainly by telephony companies in Europe. These are being carried out to find ways to create added value for subscribers and income streams for service providers. Although these are just trials, they generate several millions of dollars in revenue a year.
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.