January 14, 2010 / 12:44 PM / in 8 years

UPDATE 2-Sandvine Q4 loss widens; shares fall

* Q4 loss C$0.035/shr vs loss of C$0.013/shr yr ago

* Revenue rises 2 pct

* Shares fall 10 pct (Adds details, analyst comments, updates stock movement) By Koustav Samanta

BANGALORE, Jan 14 (Reuters) - Network equipment maker Sandvine Corp (SVC.TO) posted a wider fourth-quarter loss, hurt by stock-based compensation expenses and lower gross margins, sending its shares down 10 percent.

The company, which helps broadband and telecom operators manage data traffic, posted a net loss of C$4.7 million, or 3.5 Canadian cents a share, compared with a loss of C$1.8 million, or 1.3 Canadian cents a share, a year earlier.

Excluding items, Sandvine lost C$1.8 million, or 1.3 Canadian cents a share, for the quarter ended Nov. 30.

Quarterly revenue rose 2 percent to C$19 million.

Analysts on average were expecting a loss of 3 Canadian cents a share, before special items, on revenue of C$17.6 million, according to Thomson Reuters I/B/E/S.

The company added eight new customers in the fourth quarter, three from Asia-Pacific, three from North America and one each from the Caribbean and Latin America, and EMEA.

Chief Executive Dave Caputo said the company's revenue growth this year will be primarily driven by DSL and wireless markets.

"We believe 2010 will be a very strong year for the wireless segment revenue for Sandvine," Canaccord Adams analyst Eyal Ofir said.

In the near term, the Policy Traffic Switch 24000 (PTS 24000) will continue to contribute to the topline growth of the company as clients shift over to the new platform, Ofir added.

In September last, Sandvine launched PTS 24000, which helps carriers apply network policy controls and enable new services on their networks.

For the quarter, Sandvine's stock based compensation expenses rose to C$2.5 million from C$1.3 million, a year ago. Gross margin fell to C$13.8 million from C$15.3 million.

The Waterloo, Ontario-based company's shares, which have gained 21 percent in last three months, were down 7 percent, or 10 Canadian cents, at C$1.43 Thursday morning on the Toronto Stock Exchange. They touched a low of C$1.38 earlier in the session. (Reporting by Koustav Samanta in Bangalore; Editing by Ratul Ray Chaudhuri)

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