Reuters: Global Markets: Acme Packet shares fall as Jefferies cuts rating

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Acme Packet shares fall as Jefferies cuts rating Jun 20th 2012, 15:14 Wed Jun 20, 2012 11:14am EDT (Reuters) - Acme Packet Inc (APKT.O) shares fell to a two-year low after Jefferies downgraded the network gear maker citing a shift in spending by U.S. carriers to their wireless segments. Shares of the company, which gets roughly two-thirds of its carrier revenue from wireline business, fell as much as 8 percent to $20.21 on Wednesday on the Nasdaq. Carriers like AT&T Inc (T.N) and Verizon Communications Inc (VZ.N) are spending more on wireless expansion, which provides higher incremental revenue, at the expense of wireline investments, analyst James Kisner wrote in a note. Verizon was one of Acme Packet's biggest customers in 2010, accounting for 12 percent of its revenue that year. The shift in spending focus could make it difficult for Acme Packet to meet analysts' estimates for the second half of the year, Kisner said, downgrading the stock to "hold" from "buy". He also reduced his price target on the stock to $21 from $40. The analyst also cut his full-year earnings estimate on the company to 80 cents from 95 cents a share. Analysts on average are expecting full-year earnings of $0.92 on revenue of $332 million, according to Thomson Reuters I/B/E/S. On Tuesday, Acme Packet's rival Sonus Networks (SONS.O) bought smaller player Network Equipment Technologies (NWK.O) for $41.3 million to enter the government segment. (Reporting by Sruthi Ramakrishnan in Bangalore; Editing by Saumyadeb Chakrabarty) Link this Share this Digg this Email Reprints

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