Israeli electronic equipment maker Orbotech Ltd. (NASDAQ: ORBK)said its third-quarter profit dropped 97% due to charges and slumping sales of flat-panel display and printed circuit-board equipment. Revenues for Q3 '07 were $82.3 million, compared to $88.6 million in the second quarter of '07 and $106.9 million in the third quarter a year ago.

On the news, the stock is getting slammed, trading down over 11% to $18.72 (as of 11:23 a.m. EST). It appears we have another example of an Israeli company that is facing a challenging business climate, but is spinning it to look out for '08, because that's when it will do really well.

Rani Cohen, Chief Executive Officer, said: "Our financial results for the quarter reflect the challenging environment currently prevailing in the industries we serve, particularly among FPD manufacturers. In light of the anticipated rebound in 2008, we are continuing to invest significantly in the research and development of new products and solutions for both the PCB and FPD industries."

Investors should proceed with caution before getting caught up in the '08 euphoria.

Disclosure: Writer has no position in any stock mentioned as of 11/5/07.

Aaron Katsman is the lead Portfolio Manager and Managing Director of America Israel Investment Associates, LLC. and Senior Editor of IsraelNewsletter.com.