Powerwave Eyes High Tide From Latest Wireless Trend

Investor's Business Daily profiles Powerwave Technologies, which stands to benefit "as wireless companies and handset operators continue to invest in infrastructure to build out the faster and more powerful" 3G networks.

According to the article, Powerwave is "one of the top global suppliers of wireless radio frequency communication products, such as tower-mounted amplifiers, base station antennas, filters and boosters."

Mike Walkley at Piper Jaffray said, "It's not exciting stuff like a fancy phone you can see. They do the boring nuts and bolts, behind-the-scene stuff that helps make the wireless networks work."

Powerwave's 2005 sales grew 74% from the year before to $825 million and "company officials expect 2006 revenue to reach around $1.1 billion." Richard Valera at Needham & Co. said, "Powerwave serves the major carriers, and all are deploying 3G to some degree. Verizon is the furthest along, with Cingular Wireless and Sprint playing catch-up."

The article states that "sales related to 3G wireless generated 27% of Powerwave's fourth-quarter revenue. Cingular accounted for 23% total revenue during the quarter, up from 13% during the third quarter." Valera said, "Cingular will be deploying 3G aggressively in 2006, and Powerwave will likely continue to participate in that."

Julie Ask at JupiterResearch also noted that "Lots of operators worldwide are committed to building 3G networks," and "even markets that are still building second-generation systems — India, Africa and Latin America among them — already are looking toward 3G networks."

Commenting on Poweerwave's main competitor, Andrew Corp., Valera opined, "Andrew has had some issues in its noncore cellular business that has put pressure on overall revenue growth."

Charts via Investor's Business Daily