November 12, 2010 / 9:55 PM / in 7 years

UPDATE 1-Vecima Networks Q1 profit tops view on higher margins

* Q1 EPS C$0.08 vs est C$0.02

* Revenue down 7 pct

* To launch new products in 2011

* Sees single digit rev growth in fiscal 2011

Nov 12 (Reuters) - Vecima Networks’ VCM.TO quarterly income beat estimates, as a ramp up in production of new products boosted margins at the communications equipment maker.

Vecima said it was on the path to attain single-digit revenue growth for fiscal 2011, helped by new product introductions, which will likely ramp up in the second half of the year.

First-quarter income was up 53 percent at C$1.9 million, or 8 Canadian cents a share, from C$1.2 million, or 5 Canadian cents a share, a year ago.

Gross margins rose to 38 percent in the quarter, up from 36 percent last year. Vecima said it expects gross margins to remain in the range of 35-40 percent.

The Victoria, British Columbia-based company, which makes broadband access products used in cable, wireless and telephony networks, posted a 7 percent drop in revenue to C$26.3 million.

Analysts on an average expected the company to earn 2 Canadian cents on revenue of C$27.4 million, according to Thomson Reuters I/B/E/S.

The company also posted a foreign exchange gain of C$174,000, compared with a loss of C$579,000 a year ago.

Vecima had said in September, when it posted a surprise quarterly loss, that it would return to profitability in the first quarter.

Shares of the company have shed about 23 percent since then. They closed at C$3.85 on Friday on the Toronto Stock Exchange. (Reporting by Gowri Jayakumar in Bangalore; Editing by Roshni Menon)

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