Shares in the Israeli RRSat Global Communications (RRST) are having their best day in a long time, as the company surpassed earnings estimates and guided higher for the rest of the year. The company reported that gross margins increased to 32.4%, a 30% year-over-year revenue increase and a strong backlog of orders.

The company provides global, comprehensive, content management and distribution services to the rapidly expanding television and radio broadcasting industries, via  “RRsat Global Network,” composed of satellite and terrestrial fiber optic transmission capacity and the public Internet.

Commenting on the earnings, David Rivel, CEO said, “The second quarter of 2008 was another strong quarter, particularly in terms of revenues while improving our profitability, back to the ranges we expect. Furthermore, we continued to generate healthy cash flow, which will support our expansion strategy. Our backlog grew strongly, again to record levels offering us continued strong visibility for the coming years. In addition, we closed the acquisition of the Hawley teleport that will contribute to our growth in 2009 and beyond.”

While many Israeli hi-tech companies have struggled so far in ‘08, we have started to see some nice earnings reports, and along with RRSat, it appears that there is some hope for the second half of the year.

Disclosure: Author’s fund has a position in RRST, he has no position in any other stock mentioned as of 7/31/08.

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Aaron Katsman is Managing Editor of the Israel Opportunity Investor newsletter. He is lead portfolio manager for the Israel Growth Portfolio and Managing Director of America Israel Investment Associates, LLC. For more information, go to www.israelnewsletter.com or call 1-888-327-6179, or email aaron@profile-financial.com.

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