* Q1 EPS C$0.05 vs est C$0.08
* Revenue falls 23 pct to C$28.4 mln
Nov 12 (Reuters) - Canadian communications equipment maker Vecima Networks Inc VCM.TO reported an 85 percent drop in first-quarter profit, hurt mainly by lower capital spending by its customers.
For the quarter ended Sept. 30, Vecima earned C$1.2 million ($1.15 million), or 5 Canadian cents a share, down from C$7.8 million, or 34 Canadian cents a share, last year.
Sales fell 23 percent to C$28.4 million.
Analysts on average had expected earnings of 8 Canadian cents a share on revenue of C$26 million, according to Thomson Reuters I/B/E/S.
"In the first quarter, we began to see signs of recovery as our Q1 sales increased 38 percent quarter over quarter," Chief Executive Surinder Kumar said. "This is an indication of the initial stages of recovery and is in line with a general strengthening of forecasts."
The company began volume shipments of its new TerraceA multiunit digital transport adaptor in the first quarter.
Multi-system operators (MSO's) need to install only one such unit in an apartment building for a large number of subscribers, thereby saving MSOs the cost of providing separate set-top boxes for analog customers to view digital content.
Vecima said 15 North American MSO's are evaluating the product and it expects to launch 10 more evaluation trials in the next few months.
Shares of Vecima closed at C$5.30 Wednesday on the Toronto Stock Exchange. ($1=1.045 Canadian Dollar) (Reporting by R. Manikandan in Bangalore; Editing by Ratul Ray Chaudhuri)