July 29, 2010 / 12:09 PM / 7 years ago

UPDATE 2-Zarlink shrs touch yr-high on strong results, outlook

* Q1 EPS $0.07 vs loss $0.01/shr yr ago

* Q1 rev $58.7 mln vs est. $57.7 mln

* Sees Q2 adj EPS $0.03 to $0.05 vs est $0.04

* Sees Q2 rev $58.5 mln to $60.5 mln vs est $57.6 mln

* Shares up as much as 8 pct (Recasts; adds details, CEO comment, stock movement) (In U.S. dollars unless noted)

BANGALORE, July 29 (Reuters) - Canadian chipmaker Zarlink Semiconductor Inc ZL.TO posted a quarterly profit and forecast strong second-quarter revenue on healthy demand from communications and medical products, sending its shares up to a new year-high.

Zarlink said it was gaining on trends in the communications market, like voice-over-broadband deployments and capacity constraints due to high bandwidth mobile internet applications.

“There are ongoing concerns related to the global economy and specific foundry capacity issues for semiconductor suppliers. However, we are seeing very strong customer demand across our core product areas,” Chief Executive Kirk Mandy said on a conference call with analysts.

The Ottawa-based mixed-signal chipmaker’s first quarter was helped by continued strong demand in the communications segment, especially for its chips for timing and line circuit products.

Mixed-signal integrated circuits combine both analog and digital circuits on a single semiconductor chip.

Shares of the company were up 4 percent, or 7 Canadian cents, at C$1.96 Thursday morning on the Toronto Stock Exchange. They touched a high of C$2.04 earlier in the day.

Zarlink expects second-quarter revenue of $58.5 million to $60.5 million, while analysts were looking for $57.6 million.

It sees a profit of 3 cents to 5 cents per share for the second quarter. Analysts were expecting earnings of 4 cents a share.

In the first quarter ended June 25, Zarlink earned $10.3 million, or 7 cents a share, compared with a loss of $516,000, or 1 cent a share, a year earlier. Excluding items, earnings were 6 cents a share.

Revenue rose 18 percent to $58.7 million while its gross margin was 51 percent. The company’s 61 percent of revenue was from the Asia-Pacific, 23 percent from Europe and the rest from the Americas.

Analysts, on average, had expected earnings of 4 cents a share and revenue of $57.7 million, according to Thomson Reuters I/B/E/S.

At the end of the first quarter, the company’s cash and cash equivalents increased to $98.9 million, including net proceeds from the sale of its Optical Products Group for $13.5 million. (Reporting by Koustav Samanta in Bangalore; Editing by Jarshad Kakkrakandy and Maju Samuel)

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