Bridgewater Systems Q3 2009 - Beats Consensus Forecasts and Increases FY Guidance.

This morning Bridgewater Systems reported Q3, 2009 earnings and subsequently discussed the results and outlook during an analyst call. Analysts are likely to view the results and the business outlook as positive for the stock.

Net income for the quarter was reported at $1.7 million or $0.07 EPS, ahead of consensus forecasts of $0.05 EPS. Revenue was reported at $15.8 million, a 53% increase over prior year Q3 revenue of $10.3 million and ahead of consensus forecasts of $14.6 million for the quarter. Gross Margins contracted sequentially to 64% from Q2 2009 Gross Margins of 75% and from Q3 2008 Gross Margins of 75%. The gross margins contraction is related to the deployment of the Widespan contract and activities related to various trials and deployment preparations associated with various recent contract wins - basically scaling costs. Management expects Gross Margins to continue in the mid-60s range until H2 2010, when it anticipates that Gross Margins will expand to a target of 70% where it is expected to stabilize.

Bridgewater Systems (BWC.TO): More Takeover speculation

Since some Boardroom maneuvering  earlier this year, there has been some speculation of a takeover of BWC. Here is some more detailed speculation reported on by Andrew Willis - all in quotes.

From Andrew Willis 

"While Bridgewater Systems would prefer to be loved for its fundamentals, the tech company is becoming accustomed to drawing investors with corporate intrigue.
Bridgewater (BWC-T9.940.212.16%) is in the wireless software business, and sports at $240-million market capitalization. Backers include tech billionaire Terry Matthews. Earlier this year, the company was targeted by money manager Crescendo Partners, with a proxy fight ending peacefully and Crescendo executives joining the Bridgewater board.
As this boardroom activity played out, Bridgewater posted increasingly strong results. The company is winning new telecom clients and rolling out a new business model that draws more recurring revenue from existing customers, a list that includes most of the major global phone companies. The stock is up 241 per cent over the past 12 months.
Now National Bank Financial is speculating that Ottawa-based Bridgewater could be on the receiving end of a bid from Nokia Siemens Networks.
While the concept isn’t new - Bridgewater has long been seen as a potential target - National Bank Financial analyst Kris Thompson is taking an aggressive view on what’s coming, as he predicts a bidding war is in the offing.
“We've been suggesting that Bridgewater would be an acquisition target of NSN for many months for both its technology and key customer Verizon Wireless,” said Mr. Thompson in a report on Tuesday. He then added: “Also recall that we've suggested that Cisco would likely defend its evolved packet core position by acquiring Bridgewater if Nokia Siemens Networks were to bid for the company.”
National Bank Financial has a $13 target price on Bridgewater, and an “outperform” ranking, with "above average” risk rating."

Disclosure: I own shares of BWC.

Could Multiplied Media Be "The Next Big Thing"?

Last week, the DVC SmallTech Newsletter identified ten breakout smallcap technology stocks for YTD 2009. Many of those intersect with the RES Free Thinking Top 5 picks for 2009. Investors in all of those stocks are smiling so far as we enter the last two months of the year. Alas, but there may be one more stock that could make a lot of noise over the next few months.

Just in time for Holloween: A Few Spooky Stats YTD 2009.

Here are some random statistics from various sources:

Canadian Tech Sector
TSX/TSXV technology sector listings September 2009 - 284 including 5 new listings. Down from 310 at the beginning of the year. A 9% drop.

YTD deals in the TSX Tech Sector - 83
Mean deal size: $5.05 m
TSXV deals - 71 with a mean deal size of $1.3 million
TSX deals - 12 with a mean deal size of $27.3 million

YTD Cleantech deals
Mean deal size: $13.5 m
Top performing sector YTD TSX: InfoTech at 69%
(Source: TSX) 

Bridgewater Systems (BWC.TO) Q3 2009 Preview: Will momentum continue?

Earlier this month, BWC stock peaked at $9.80 per share, more than quadrupling the share price of $2.17 as it entered 2009. It has come off those highs since and it looks like it is now trading in the mid $8 range ahead of its Q3 financial report, which is scheduled to be released at 7:00AM on November 5, 2009. The investor conference call is scheduled for 8:30AM that day, and the call-in numbers are:

1-416-844-3432
1-877-974-0446

After a remarkable run since the beginning of the year, investors may wonder how much upside remains in the stock. As a reminder, performance for H1 2009 was as follows:

GOOG Beats Expectations...Will CX .TO Follow Again?

During the Q4 earnings season I began highlighting an interesting pattern between Google earnings performance and Cyberplex performance. Essentially, each time that Google exceeded earnings expectations, Cyberplex also exceeded forecasts when it reported approximately two to three weeks later. In July, I became a little bolder and proposed a trading idea that Google performance has consistently foreshadowed Cyberplex performance, suggesting that traders could accumulate ahead of CX.TO earnings report.