C-COR Is the Little Telecom That Could

04/10/2007 12:00 am EST

Focus:

Jim Collins

Chairman and CEO, Insight Capital Research & Management, Inc.

Jim Collins, editor of OTC Insight, likes a small telecom-equipment company that makes key products in growing areas.

C-COR Incorporated (NASDAQ: CCBL) is a global provider of integrated network solutions that include access and transport equipment, software solutions, and technical services for broadband networks. The company primarily serves cable operators throughout the United States.

C-COR operates through three business segments: C-COR Access and Transport, C-COR Solutions and C-COR Network Services. C-COR Access and Transport includes the flexible, scalable amplitude-modulation head end/hub optical platform and line of optical nodes, a full offering of radio frequency amplifiers, and an Ethernet optical transport system for business services applications.

The C-COR Solutions product portfolio includes “on demand” content-management systems, including software and hardware, for delivery of video on demand and digital advertising as well as application-oriented operations support software for network and service assurance, workforce management and policy management and bandwidth allocation.

C-COR Network Services offers network operators a comprehensive set of technical and operational services that are designed to facilitate a smoother transition to next-generation network infrastructures and operations. Services provided by the unit include outsourced operational services, network design and engineering, network integration, outside plant and construction services and consulting.

Last month, C-COR announced that it is providing the Hybrid Fiber Coax (HFC) networks of two major travel hubs in Asia. Singapore’s Changi Airport and Thailand’s new Bangkok Suvarnabhumi Airport are deploying C-COR’s 1GHz broadband amplifiers and optical transmission equipment to deliver an in-house suite of cable TV services.

Changi, one of the newest and busiest airports in Asia, is deploying a full suite of C-COR’s HFC equipment, which will deliver in-house cable services across Changi’s Terminal 3, opening in 2008, and also provide a separate cable TV system for the public.

For the second quarter of fiscal 2007, which ended last December 29, CCOR reported net income of $0.12 per share, compared with a loss of $0.33 reported in the prior year. Total revenue increased 20% to $80.1 million. Bookings in the second quarter of fiscal year 2007 were $98.2 million for a book-to-bill ratio of 1.23.

Demand for C-COR’s offerings, however, depends significantly upon the size and timing of capital spending by cable network operators, which can be difficult to predict. Additionally, the company depends on a small number of customers in a single industry.

C-COR’s stock reached a multiyear high on February 22, 2007 before retreating modestly. Of the approximately 41.5 million shares in float, 740,005 trade daily. Banks and mutual funds own 37% and management owns an additional 5% of the shares outstanding. The stock has a relative strength of 94 and receives a rating of A-minus for accumulation/distribution.

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