April 6, 2010 / 12:08 PM / in 8 years

UPDATE 2-Sandvine posts surprise Q1 profit; shares hit 2-yr high

* Q1 EPS excl items C$0.01 vs est loss C$0.02

* Q1 revenue rises 18 pct

* Shares up 15 pct (Recasts; adds analyst comments, details)

April 6 (Reuters) - Canadian network equipment maker Sandvine Corp SVC.TO posted a surprise first-quarter profit, helped by better sales and lower costs, sending its shares up 15 percent to a two-year high.

“Our results are starting to show the benefit of some significant investments that we have been making to expand Sandvine’s long-term market opportunity,” Chief Executive Dave Caputo said in a statement.

Operating expenses for the quarter came down 17 percent to C$15.8 million.

The company said on a conference call that it signed an agreement with the province of Ontario for research and development funding, under which it could receive up to C$25.5 million in credits between February 2009 and February 2014.

Sandvine, which helps broadband and telecom operators manage data traffic, posted net income of C$0.6 million, or breakeven per share, compared with a loss of C$4.8 million, or 4 Canadian cents a share last year.

Revenue for the quarter rose 18 percent to C$21.9 million.

Excluding special items, the company earned 1 Canadian cent a share.

Analysts on average had expected a loss of 2 Canadian cents per share, on revenue of C$19.7 million, according to Thomson Reuters I/B/E/S.

Sandvine had won six new service provider customers during the quarter.

Shares of Waterloo, Ontario-based Sandvine were up 9 percent at C$2.14 Tuesday morning on the Toronto Stock Exchange. They touched a high of C$2.25 earlier in the session, making the stock one of the top gainers on the exchange. (Reporting by Arnika Thakur in Bangalore; Editing by Gopakumar Warrier, Unnikrishnan Nair)

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