* Q3 EPS $0.02, adjusted EPS $0.21
* Sees Q4 adjusted EPS $0.22-$0.24
* Expects Q4 revenue of $170-$175 million (Adds executive and analyst quotes; in U.S. dollars unless noted)
By Alastair Sharp
TORONTO, Nov 3 (Reuters) - Canadian mobile modem maker Sierra Wireless Inc (SW.TO) reported a third-quarter profit on Wednesday, boosted by strong revenue from its growing machine-to-machine (M2M) communications unit and tighter cost control.
Sierra said it expects a softer fourth quarter in its mobile computing line-up, which makes up more than half of its revenue, but it was well placed for a strong 2011 as consumers increasingly seek out mobile devices.
Sierra's Chief Executive Jason Cohenour told analysts on a call that the company, whose products include AirCard USB modems and AirLink routers, has secured three contracts to put components into laptops from three major manufacturers.
"We've got a good roster of design wins," he said. "We expect they are going to be significant contributors to 2011."
But he also said that one major customer had pulled back on its AirCard orders for the fourth quarter.
"Despite a softer outlook for Q4, we are bullish on our mobile computing prospects for 2011," he told an analyst call.
Sierra, whose major customers include U.S. carriers Sprint Nextel Corp (S.N) and Clearwire Corp CLWR.O, said it expects adjusted earnings of between 22 cents and 24 cents a share in the current quarter on revenue of $170 million and $175 million.
The Vancouver-based company had net income of $700,000, or 2 cents a share, on revenue of $172.7 million in the third quarter. It earned $6.5 million, or 21 cents a share, on an adjusted basis, excluding acquisition, restructuring and other costs.
"I think there was some favourable tax which helped the EPS but other than that it seems pretty much in line," said Gus Papageorgiou, an analyst at Scotia Capital.
Analysts, on average, were expecting earnings of 16 cents a share on revenue of $171 million, according to Thomson Reuters I/B/E/S.
In the year-ago quarter, the company reported a loss of 25 cents a share on revenue of $135.7 million. Its adjusted earnings were 19 cents a share.
Revenue for the machine-to-machine unit, which provides components for products such as Barnes & Noble's (BKS.N) Nook e-reader, was up 42 percent to $76.1 million, while mobile computing revenue was 18 percent higher at $96.6 million.
The company said it also expected its components to be in two other consumer devices due to be launched in 2011.
Sierra reported its results after the close of trading on Wednesday. Its shares closed up 0.4 percent at C$12.27 on the Toronto Stock Exchange. The stock has jumped 70 percent since reporting better-than-expected second-quarter results in July and is up 10 percent since the start of the year. (Reporting by Alastair Sharp; editing by Peter Galloway and Carol Bishopric)