TEKELEC REMARKS CREATE DECLINE.Byline: Ben Sullivan Daily News Staff Writer Shares in telecommunications equipment specialist Tekelec Inc. fell more than 10 percent Thursday on concern over a possible dip in the company's second-quarter orders. After opening at $45.50, Tekelec shares lost as much as $5, before regaining some ground to close down $4.875 at $40.625. More than 1 million shares traded hands, nearly four times the issue's six-month average daily volume. Thursday's drop came a day after Tekelec officials finished a road show to New York New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of and Boston to introduce analysts and investors to the firm's new chief executive, Michael Margolis. Margolis replaced retiring CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. Allan Toomer in February. Among the issues on which Margolis was queried by investors was Tekelec's second quarter book-to-bill ratio Book-to-Bill Ratio The technology industry's demand-to-supply ratio for orders on a "firm's book" to number of orders filled. Notes: This ratio tells whether the company has more orders than it can deliver (if greater than 1), has the same amount of orders that it can , a figure that compares the dollar amount of new orders coming in to existing orders shipped over a given period. A ratio of 1 means that the amounts are equal and implies a steady stream of business. Several analysts have predicted the company's book-to-bill ratio will drop below 1 for the quarter, though Tekelec has said it should go down no further than to 0.9. That would mean Tekelec is not getting as many new orders as it's currently filling. Kevin Slocum, an analyst at SoundView Financial Group, said he blamed his own comments in part on Tekelec's Thursday dip. In a daily report published by First Call Corp. and distributed to analysts and investors, Slocum said some investors were disturbed by the company's likely ratio. But in an interview Thursday afternoon, Slocum said he personally is unconcerned by the figure. ``I didn't downgrade Downgrade A negative change in the rating of a security. Notes: For example, an analyst may downgrade a stock from strong buy to buy, or a bond rating agency may downgrade a bond from AAA to AA. the stock,'' Slocum said. ``This is a paranoid market. You say anything and it gets overplayed.'' Slocum also said that because Tekelec's business model is based on long-term contracts, judging its strength by book-to-bill can be misleading. ``This isn't really a backlog business,'' he said. Analyst Brian Modoff at B.T. Alex Brown Alex Brown may refer to:
Tekelec manufactures and services diagnostic testing Diagnostic testing Testing performed to determine if someone is affected with a particular disease. Mentioned in: Von Willebrand Disease equipment for large computer networks, and network switching equipment used in the telecommunications industry. The company had 1997 revenues of $125.2 million and has at Thursday's close a market capitalization Market Capitalization A measure of a public company's size. Market capitalization is the total dollar value of all outstanding shares. It's calculated by multiplying the number of shares times the current market price. This term is often referred to as market cap. of $1.08 billion. |
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