April 15, 2010 / 5:20 PM / 7 years ago

UPDATE 2-Guestlogix's Q1 in line; targets Asia-Pac

* Q1 EPS breakeven, meets estimates

* Q1 rev C$6 mln, meets estimates

* Says looks to expand footprint in Asia-Pacific

* Looks to expand into European rail industries

* Says could see near-term fluctuations in EBITDA (Recasts; adds conference call details, analyst comments, share movement)

By Arnika Thakur

BANGALORE, April 15 (Reuters) - GuestLogix Inc GXI.TO, which sells onboard retail technology to airlines and railways, posted first-quarter earnings that met market expectations, helped by an increase in the number of passenger trips.

The company is targeting a 20 percent to 25 percent airline market share in Asia-Pacific by the year end, and is also looking to expand into the European rail industries, it said in a statement.

GuestLogix software and handheld devices are used by carriers such as American Airlines AMR.N and WestJet Airlines (WJA.TO) to allow passengers to show tickets and buy food and other merchandise with credit cards while on board.

“We are looking for targets that can accelerate our deployment rate, extend our product offering or enhance our global customer support capability, particularly for the rail industry,” the company said on a conference call with analysts.

Paradigm Capital analyst Doug Cooper, who has a “buy” rating on GuestLogix stock, said he sees the company well positioned to benefit as airlines continue to unbundle their products and services.

The airlines are moving toward more of an user-pay model as opposed to an all-inclusive fare model and they will need a technology partner like GuestLogix to charge for all those services, Cooper said.

“They get paid on a transaction basis; so the more people transact on board, the greater the amount of revenue they have,” he said.

For the first quarter, passenger trips under agreement increased 15 percent to 947 million, while passenger trips deployed rose 70 percent to 777 million, the company said.

GuestLogix that has been expanding its concierge services offering, OnTouch, also said it might see near-term fluctuations in EBITDA and bottom-line results due to the increased investments.

GuestLogix shares, which have risen 50 percent in the last three months, were trading down about 1 percent at C$1.70 Thursday afternoon on the Toronto Stock Exchange.

The company posted net income of C$0.3 million in the quarter, compared with a loss of C$0.3 million last year. It posted breakeven results in both quarters on a per share basis.

Revenue for the first quarter rose 50 percent to C$6 million.

Reporting by Arnika Thakur; Editing by Jarshad Kakkrakandy, Unnikrishnan Nair

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