PairGain Shares Rise 12% in Heavy Trading

Shares of PairGain Technologies Inc. climbed 12% Wednesday as Wall Street buzzed about the company’s recent sales spurt and its chances of outperforming third-quarter earnings forecasts.

PairGain shares rose $2.81 to close at $25.38 a share in Nasdaq trading. Investors made the company the fourth most actively traded stock as 13.2 million shares changed hands.

“There’s still some uncertainty in the overall market, but it appears that the good times have returned for PairGain,” said Michael Neiberg, an analyst with Furman Selz brokerage in New York.

PairGain’s second-quarter earnings of 16 cents a share were hurt in a price war with competitor Adtran Inc. of Huntsville, Ala. Both firms make products that transmit voice and data phone calls at high speeds over traditional telephone copper wires.

Analysts and investors had expected Adtran’s market share to rise as industry prices fell even more this quarter. Analysts had estimated that PairGain would earn only 15 cents a share for the third quarter.

But PairGain has played catch-up over the past six weeks, said Neiberg.

He linked its success to growing demand from current customers and an increase in new business. In addition, customers other than telephone companies have been seeking the company’s high-speed connections for their computer networks.

PairGain grabbed headlines last month when rumors circulated that it might be the target of a takeover. A two-day trading frenzy ensued as investors speculated about whether the Tustin company would be bought by Lucent Technologies Inc., which makes equipment for digital phone networks. Lucent, though, hasn’t made a bid.