March 22, 2011 / 4:11 PM / in 7 years

UPDATE 2-Hemisphere GPS posts surprise loss, shares drop

* Q4 loss $0.07/shr vs est $0.00

* Rev $12.2 mln vs est $15.7 mln

* Margins fall to 40 pct from 43 pct

* Shares fall as much as 25 pct (Adds gross margin and sales deferral details, share movement)

March 22 (Reuters) - Canada’s Hemisphere GPS Inc posted a surprise quarterly loss as margins were hurt by a weak U.S. dollar, as well as deferral of revenue to later quarters and higher operating costs, sending its shares down as much as 25 percent.

The GPS maker’s sales in the agriculture segment, which contributes about 80 percent to revenue, fell almost a third as some orders were deferred into the first half of 2011.

Shares of the Calgary, Alberta-based company fell to a low of C$1.04, before paring some losses to trade down 17 percent at C$1.14. They were the second biggest percentage loser at mid-day on the Toronto Stock Exchange.

Fourth-quarter margins fell to 40 percent from 43 percent last year, as inventory rose due to the sales deferral and the U.S. dollar weakened.

The company’s net loss -- its seventh straight loss -- widened to $3.8 million, or 7 cents a share, from $2.5 million, or 4 cents a share, a year ago.

Revenue at the company, which competes with Trimble Navigation Ltd and NovAtel Inc, rose slightly to $12.2 million.

Analysts on an average were expecting a profit of $0.08 million, or break-even per share, on revenue of $15.7 million, according to Thomson Reuters I/B/E/S.

Operating expenses were $8.9 million in the quarter, an increase of $1.5 million compared with last year. (Reporting by NR Sethuraman; Editing by Sriraj Kalluvila, Roshni Menon)

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