BroadSoft beat expectations, surprise analysts on high sales in the US and Europe

Friday, September 14th, 2012 5:13:45 by

BroadSoft, the developers of mobile communications platforms, beat the expectations on quarterly revenues polled by analysts. Despite the slow economy and low spending budgets of the cellular carriers, the company not only made good sums of profits in the US but all over the world, especially in Europe.

Europe is worth mentioning because the region is still living through economic miseries and sales, demand and supply are all at their all-time lows. Against all odds, BroadSoft reported revenues and totted the shared price up.

Europe, Middle East and Africa region, EMEA, reported a share of 24 percent in the total revenues of the company, well over 15 percent the sector reported last year in the same quarter. The regional success coupled with the US sales figures surprised analysts and forced them to rephrase their ratings on BSFT stock to buy.

“That was a bit surprising,” Sanjit Singh, an analyst for Wedbush Securities said. “Everyone else in this kind of market that sells to carriers have been seeing carriers pulling back on spending.”

However, Singh was not very optimistic about the future earnings, especially in running quarter. According to him, this quarterly report was a mere good timing than a good strategy.

“With Europe specifically you had a couple of deals that were sitting in the pipeline and they just happened to come through this quarter,” he said.

William Blair analyst Dmitry Netis however, was of a different opinion. He thinks Broadsoft has caters to a different domain than other vendors to the carriers. They are software producers and new applications and updates are always in demand. Moreover, BroadSoft’s products are cost effective in purchase and use.

“All of the telco-focused names have been acting terribly,” he told IBD. “But BroadSoft is like an arms dealer to carriers.”

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