Plantronics shares climb after unit sale, upgrade

Plantronics rises after headset maker says it will sell Altec Lansing; analyst upgrades

• On 12:27 pm EDT, Monday October 5, 2009

SAN FRANCISCO (AP) -- Shares of Plantronics Inc. climbed Monday after the headset maker said it will sell its Altec Lansing audio speaker business to private equity firm Prophet Equity LP for $18 million. The announcement led an analyst to upgrade the stock.

Shares of Santa Cruz, Calif.-based Plantronics rose $2.03, or 8.2 percent, to $26.80 in afternoon trading, putting the stock within striking distance of its 52-week high of $28.55 set Sept. 17.

The company said Friday the deal will let it focus on its unified communications business, which makes headsets for phones.

Plantronics expects to log a related charge of $13 million to $16 million excluding tax benefits during the quarter ended Sept. 26.

In a Monday note to clients, Morgan Keegan analyst Tavis McCourt upgraded the stock to "Outperform" from "Market Perform." He said the sale is "clearly a positive" and that management's indication that it believes in using excess cash to buy back stock makes him more comfortable with the way Plantronics is allocating assets.

"We see little earnings risk near term, and potential for upside if the company's enterprise business picks up or (unified communications) becomes a material contributor in calendar 2010," he wrote.