Even After Surge Avici Systems (AVCI) May Be Worth Watching

Even with Avici Systems' (Nasdaq: AVCI) surge today ($7.59 +37.25%) after strong results you may want to add the stock to your radar.

The company has reported two awesome quarters in a row, but stil has little respect on Wall Street - with both analysts that cover it still negative on the stock.

Today, the company reported that gross revenue for the three and six-months ended June 30, 2006 was $25.3 million and $46.7 million, respectively, compared to $11.6 million and $22.4 million, respectively, for the three and six-month periods ended June 30, 2005. THIS IS BIG

GAAP net income for the six-months ended June 30, 2006 was $2.6 million, or $0.19 per share, compared to a GAAP net loss of $8.3 million, or $0.64 per share, for the six-months ended June 30, 2005. Non-GAAP net income for the six-months ended June 30, 2006 was $10.4 million, or $0.78 per share, compared to Non-GAAP net loss of $9.3 million or $0.73 per share for the prior year six-month period ended June 30, 2005. THIS IS HUGE

CEO, Bill Leighton, was positive for the rest of the year, saying, "Due to a surge and acceleration in demand this quarter's revenue and bottom line results have far exceeded our expectations and resulted in the company turning cash flow positive. We expect to continue to see strong revenue and bottom line results in 2006"

... Leighton did put a little cautionary note in the report, saying, "business conditions driving this increased demand can change significantly."

In addition to surging earnings, the company has cash and equivalents of $52.6 million, more than half the market-cap of $102.36 million.