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Syniverse Is Trying To Calm Investors

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By RICHARD MULLINS rmullins@tampatrib.com

The Tampa Tribune

Published: November 8, 2008

TAMPA - Executives of Syniverse Holdings are on a cross-country road trip visiting dozens of top investors to try to calm nerves after stock in the company fell more than 50 percent late this week.

Typically, Tampa-based Syniverse operates behind the scenes as a neutral clearinghouse between cell phone carriers, handling roaming charges and many text messages.

The stock fell after Syniverse disclosed that two of its clients, Sprint and Alltel Wireless, devised a way to coordinate their own transactions. Because another big customer, Verizon Wireless, is set to purchase Alltel, that could cut off some revenue from three important U.S. clients.

"In this market, just any whiff of what could be perceived as bad news, and your stock gets hammered," said Syniverse Chief Executive Officer Tony Holcombe. That said, Holcombe noted a potential $20 million impact on total 2008 revenue of about $500 million. "That's not insignificant, but to see the stock go from $18 to $8.50 per share, we don't quite understand why the street reacted that way."

Especially, he noted, as the company continues to grow quickly and retains more than 600 carriers around the world. Other contracts in negotiations with Verizon could effectively neutralize that drop in revenue, Holcombe said.

On Friday, Syniverse stock closed at $8.92, down $1.07, or 10.71 percent.

Profits in the quarter that ended Sept. 30 jumped 55 percent to $25.5 million, or 37 cents per share, from $16.5 million, or 24 cents per share, a year ago. Revenue grew 37 percent to $137.2 million from $100.3 million in the year-ago period. Syniverse backed its year-ahead forecast for net income of $69 million to $74 million, with revenue of $485 million to $495 million.

Still, analysts were expecting more - profits: 43 cents per share on revenue of $132.4 million, according to a poll by Thomson Reuters. And analysts project full-year earnings of $108 million, with sales of $497.3 million.

Information from The Associated Press was used in this report. Reporter Richard Mullins can be reached at (813) 259-7919.

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