* Q4 adj EPS $0.27 beats Street
* Guides H1 EPS, rev above estimates
* Shares rise 11 pct (Recasts; adds conference call details, analyst comments)
By Shrutika Verma
BANGALORE, Feb 11 (Reuters) - Tekelec TKLC.O, which helps phone companies enable services such as caller ID and number portability, posted quarterly earnings that beat Wall Street targets and forecast a strong first half, sending its shares up 11 percent.
Results for the fourth quarter gained as U.S. telecom service providers continued to add subscribers, and the company got more business from its higher margin products.
"Results were right in line... it is more positive that the guidance for 2009 was ahead of expectations, that is why the stock is doing well," Robert W. Baird & Co analyst Kenneth Muth said.
Tekelec's results come as a bright spot even as network giant Cisco Systems (CSCO.O) earlier this month forecast a gloomy quarter and phone companies AT&T and Verizon Communications (VZ.N) said they would rein in spending.
Tekelec commands a strong market share in some of its businesses, and services such as number portability are seen as essential by service providers.
Number portability ensures that subscribers retain their phone numbers when they switch networks.
"Number portability was the standout revenue category, with sales of $19.2 million more than doubling sequentially and year over year," analyst Muth wrote in a note to clients. The business was up 124 percent sequentially, he added.
Tekelec currently holds about 85 percent of market share in North America, which accounted for about 36 percent of revenue in the fourth quarter.
The company, which sees new orders of between $160 million and $180 million for the first six months of the year, said second-quarter orders are expected to be significantly higher than the first quarter.
For the fourth quarter, orders fell 14 percent to $160.6 million from the year-ago period. As of Dec. 31, backlog was $412.1 million compared with $369 million as of Sept. 30.
"They have a lot of deferred revenue and orders on their books already... so that gives them a better visibility than others," Muth said.
For the first half, the company expects adjusted earnings of $0.36-0.46 a share on revenue of $225 million to $240 mln.
Analysts were expecting earnings of 37 cents a share and sales of $217.6 million for the period.
For the fourth quarter, net income rose to $13.9 million from $10.4 million in the year-ago period.
Excluding items, earnings from continuing operations stood at 27 cents a share. Analysts expected 24 cents, according to Reuters Estimates. [ID:nWNAB1175]
Revenue from continuing operations rose 4 percent to $119.9 million, compared with analysts' expectation of $120.80 million.
In December, the company acquired privately-held mBalance, a developer of messaging solutions, and expected the deal to be slightly accretive in 2009, excluding items.
Shares of the Morrisville, North Carolina-based company rose $1.36 to $14 Wednesday on Nasdaq. (Reporting by Shrutika Verma in Bangalore; Editing by Deepak Kannan, Saumyadeb Chakrabarty)