TULSA, Okla. (AP) _ The stock of Williams Communications Group is climbing, with analysts saying the fiber optic network company's shares are undervalued.
Williams Communications' stock surged to $2.49 by noon Thursday, the highest closing price in three months.
The company operates a 33,000-mile fiber optic network that transmits video, voice and data for long distance carriers, Internet providers and the major television networks.
The company's stock headed up after SBC Communications and Yahoo! Inc. announced a marketing deal to co-brand high-speed Internet service to SBC customers in Oklahoma and 12 other states.
Williams Communications network provides the network backbone for the two companies.
Its stock dropped from more than $20 in January to a low of $1.11 last month. Investors sold off stocks of Williams Communications and its rivals beginning earlier in the year amid talk of too much capacity on networks using the latest technology.
But analysts say Williams Communications' stock is undervalued and business is growing.
Cary Robinson with Bancorp Piper Jaffray in Minneapolis rates the stock a buy with a one-year price target of $10.
``The issue here is what demand for Internet infrastructure is going to be like after we get out of this recession,'' Robinson said.
The company reported a net loss of $272 million, or 55 cents a share, in the third quarter, up 81 percent. But revenues climbed 42 percent, to $297.8 million.
Chief Executive Howard Janzen said higher revenues demonstrates that business is growing. Current losses jumped partly because operating expenses doubled after its network was completed and accounted for.
``Williams Communications stands ready to benefit as the economy diverges from the current downturn,'' Janzen said.
The company cut 400 jobs in summer, including about 300 in Tulsa, where it now employs about 2,900.
The company expects to become profitable in about two more years and is relying on interim financing to keep it going in the meantime.