BATM stumbles on earnings downgrade

7th Jan 2014 13:31

A warning that earnings would be lower than anticipated sent shares in US-Israeli tech company BATM Advanced Communications tumbling lower on Tuesday.Less-than-expected revenues at its telecom division in the US and Latin America in the fourth quarter and 10% appreciation of the Israeli shekel against the US dollar have meant that earnings before interest, tax, depreciation and amortisation will be below market expectations at $2m-$2.5m. This was offset somewhat by the higher revenue contribution of the medical division, although this division has lower profit margins, meaning group revenue for full year 2013 will be in line with expectations at approximately $114m.The diagnostics business performed well, as it made first sales of its HIV kits, and increased its contribution to revenue in the fourth quarter compared with the equivalent period in 2012.Management conceded that the telecoms division, which is now under the aegis of a new sectional boss, continues to be vulnerable to macro-economic conditions from appreciation of the Israeli shekel and telecoms network operators deliberating over-upgrading their systems.Shares in BATM were down 16.4% to 16.5p at 13:55 on Tuesday.