May 6, 2010 / 10:40 AM / 7 years ago

UPDATE 2-Wi-LAN posts Q1 profit, raises 2010 outlook

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

* Q1 cash revenue up 65 pct

* Sees 2010 rev between C$43-C$47 mln

* Shares jump as much as 19 pct (Recasts; adds conference call details, analysts’ comments, updates stock movement)

By Koustav Samanta

BANGALORE, May 6 (Reuters) - Technology licensing firm Wi-LAN Inc WIN.TO raised its 2010 revenue and proforma earnings outlook after it posted a quarterly profit, partly helped by higher-than-expected royalty reports from licensees, sending its shares up 19 percent to touch a new year-high.

The company said it now expects 2010 revenue to be in a range of C$43.0 million to C$47.0 million, up from its prior forecast of C$40.0 million to C$45.0 million.

It sees 2010 proforma earnings in a range of C$8 million to C$11 million, up from its previous outlook of C$5 million to C$8 million.

“The outlook the company has presented is pretty conservative. They should not have a difficult time exceeding the forecast that they have issued,” CIBC World Markets analyst Todd Coupland told Reuters

Wi-LAN, which develops and licenses intellectual property for products in the communications and consumer electronics markets, said it signed license agreements with nine companies during the quarter including six for wireless technologies, two for V-Chip and one for wireline.

“They will be able to sign additional wireless licensing agreements in WiFi and CDMA devices in the United States with notebook and mobile handset vendors, allowing them to further increase their outlook,” Coupland said.

Analyst Dev Bhangui of Fraser Mackenzie said Wi-LAN signed about 50 licenses in 2009 and if they keep doing it at the same rate, revenue would be growing every year.

Bhangui, who has a “strong buy” rating on Wi-LAN’s stock, said the company’s second quarter will be weaker than the first owing to seasonality factors.

CIBC’s Coupland expects the company to remain active in terms of acquiring additional patents, including those available from Nortel Networks Corp NRTLQ.PK.

Coupland has a “speculative sector outperformer” rating on Wi-LAN’s stock.

For the first quarter, the company reported net profit of C$1.1 million, or 1 Canadian cent a share, compared with a loss of C$1 million, or 1 Canadian cent a share, a year earlier.

Proforma earnings stood at 7 Canadian cents a share.

Revenue rose 65 percent to C$16.5 million, including C$13.9 million in royalties, up 39 percent.

The company attributed its revenue increase also to sale of certain patent assets.

Shares of the company were up 7 percent at C$3.10 Thursday afternoon on the Toronto Stock Exchange. They touched a high of C$3.45 earlier in the day. (Reporting by Koustav Samanta; Editing by Unnikrishnan Nair)

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