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UPDATE 1-Tandberg Q3 EBIT up 11 pct, beats forecast

Published 10/15/2009, 12:43 PM
Updated 10/15/2009, 12:45 PM
TTEF
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* Results helped by strong performance in U.S. public sector

* Says customers, partners reacted positively to Cisco offer (Adds details, CEO comments)

OSLO, Oct 15 (Reuters) - Norwegian video conferencing systems maker Tandberg beat forecasts on Thursday with a rise in third-quarter operating profit, and said customers had reacted positively to a bid from Cisco Systems.

Earlier on Thursday, a large shareholder group in Tandberg snubbed a $3 billion bid Cisco launched on Oct. 1.

"There have been favourable reactions from partners, customers and employees to the Cisco offer," Tandberg ASA's Chief Executive Fredrik Halvorsen said at a presentation about the offer, which has also received backing from Tandberg's board.

Halvorsen declined to offer any comments on the shareholder group that had snubbed Cisco.

"For clarification, the board wants to emphasize that the management team will continue in their existing functions, and with their existing total compensation packages," Tandberg said in a statement after the close of trading on the Oslo bourse.

Tandberg's operating profit rose 11 percent to $50 million in the three months to end-September, beating the average forecast of $48 million in a Reuters poll of 15 analysts, whose estimates ranged from $44 million to $68 million.

"The commercial business continued to experience prolonged sales cycles, but the team executed well in all areas and gained momentum in network sales," Tandberg said about the Americas region -- its biggest market.

Tandberg stuck to its policy of not giving financial guidance.

Rival video conferencing products maker Polycom Inc reports third-quarter results on Oct. 20.

Polycom and Tandberg dominate the video conferencing market, which is expected to grow as companies looking to cut travel costs choose video conferencing as a cheaper alternative to face-to-face meetings.

Tandberg's third-quarter revenues rose 12 percent to $235 million, beating analysts' average forecasts of 221 million in a Reuters poll, their estimates ranging from $214 million to $254 million.

"The main driver is the excellent performance of the U.S. public sector team," Halvorsen said about sales growth in the quarter.

Tandberg said it sold 18,260 units in the third quarter, up from 17,487 in the same quarter 2008, and higher than the average forecast of 17,122 in the poll.

Tandberg shares closed up 1.8 percent at 155.30 Norwegian crowns. (Reporting by Richard Solem and Joergen Frich; Editing by Rupert Winchester)

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