* What: Q2 results
* When: Thursday, July 30
* Co expected to post higher rev, raise FY rev view
By Ashutosh Joshi
BANGALORE, July 29 (Reuters) - Canada’s Bridgewater Systems Corp BWC.TO may raise its full-year revenue outlook when it reports results on Thursday, boosted by strong demand for its wireless data solutions that help telecom operators manage their mobile data traffic.
The company, which is also expected to post higher second-quarter revenue, will benefit as telecom operators such as Verizon (VZ.N), its largest customer, report strong wireless data revenue for the quarter, analysts said.
However, a strong Canadian dollar could weigh on the company’s earnings, M Partners analyst Husein Kirefu said.
“They have 75 percent of their sales outside of Canada, that is quite a bit of foreign exchange risk to take on,” Kirefu said.
Shares of the Ottawa-based company have more than doubled in value over the past six months, helped by its strong quarterly results.
Bridgewater, which had a backlog of C$32 million at the end of the first quarter, is likely to win more customers in Europe and Asia in the second half of the year, analysts said.
“The company had a bunch of announcements this quarter. Cox Communications selected them for the wireless rollout...Verizon is doing very well with data services business. I think they should get few more wins there and pull some more business in 2010 and 2009,” National Bank Financial analyst Kris Thompson said.
A significant part of Bridgewater’s revenue comes from Verizon Wireless, and its other major customers include Sprint Nextel (S.N), Virgin Mobile USA and Vodafone.
“As carriers are building out next-generation networks, they require solutions like Bridgewater‘s,” BMO Capital Markets analyst Thanos Moschopoulos said.
The company should show good earnings growth despite the recent appreciation in the Canadian dollar, driven by its strong fundamentals, Moschopoulos said.
For the second quarter, six analysts on average expect the company to earn 7 Canadian cents a share, before items, on revenue of C$13.3 million, according to Reuters Estimates. Bridgewater reported revenue of C$11.8 million in the year-ago period.
In May, Bridgewater, whose solutions help mobile carriers manage subscriber data to drive their average revenue per user, raised the lower end of its full-year revenue outlook by C$2 million to a new range of C$54 million to C$58 million.
The global channel partnership deal Bridgewater entered into with Hewlett-Packard (HPQ.N) during the second quarter could help the company win more GSM customers, analysts said.
Analyst Kris Thompson expects the company to announce at least one third-generation GSM win in the second half of the year through HP, which is one of the largest vendors of telecom infrastructure software and has a number of GSM global carriers as customers.
Bridgewater has been scouting for more GSM customers, especially in Europe and Asia, and is also looking at acquiring companies to boost its customer base in that segment.
Shares of the company were down 2 Canadian cents at C$5.98 Wednesday afternoon on the Toronto Stock Exchange. (Editing by Deepak Kannan)