February 1, 2008 / 7:53 PM / 10 years ago

Dalsa stock jumps as earnings surprise

TORONTO, Feb 1 (Reuters) - Shares of Dalsa Corp DSA.TO soared to their highest level in more than three months on Friday as investors cheered a 37 percent jump in profit, and a shareholder with a reputation for shaking things up took a bigger stake.

Dalsa’s stock jumped C$1.43, or 15.1 percent, to C$10.90 after the digital-imaging and semiconductor company beat fourth-quarter earnings expectations and painted a rosy picture of the future.

The shares had shed about 60 percent of their value over the last 3-1/2 years as the company’s revenues and order backlog dried up.

“Our results this quarter are a strong indication that we are on our way to returning the company to its traditional levels of profitability,” Brian Doody, the company’s chief executive, said in a statement.

Separately, New York-based Crescendo Partners LP said it acquired 506,000 common shares, increasing its holding in the Waterloo, Ontario-based firm to about 10.8 percent.

Dalsa released its results after the close of markets on Thursday, about an hour before the statement from Crescendo.

“Crescendo typically pushes for change at the board level, and could be a serious agent of change in calendar 2008,” David Hodgson, an analyst at Genuity Capital Markets, wrote in a research note.

“Given the poor performance of the share price over the past three years, we believe investors would give any proposal serious consideration.”

Dalsa’s revenue was up nearly 10 percent at C$47.3 million in the quarter.

The firm exports about 95 percent of its products and sells about 80 percent of them in U.S. dollars.

However, despite the strong quarterly results, Daniel Kim, an analyst at Paradigm Capital, wrote in a note: “Given the state of decline in semiconductor capital equipment, it is our opinion that this earnings turnaround is unfortunately, not sustainable.”

$1=$0.99 Canadian Reporting by Jonathan Spicer; Editing by Rob Wilson

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