UPDATE 1-Canada's MKS Q1 profit more than doubles

* EPS $0.14 vs $0.05 year ago, revenue rises 2 pct

* Sees 10 pct annual fall in interoperability business

Sept 9 (Reuters) - Canadian software and services provider MKS Inc MKX.TO said its first-quarter earnings more than doubled, helped mainly by higher revenue from its services segment.

However, the company said its interoperability business is expected to see a continued decline of about 10 percent annually.

Net income for the first quarter ended July 31 rose to $1.4 million, or 14 cents per share, from $0.6 million, or 6 cents per share, a year ago.

MKS, which declared a quarterly cash dividend of 12.5 cents per share, said total revenue rose 2 percent to $15.7 million, while service revenue increased 24 percent to 42.7 million.

Two analysts on average had expected earnings of 15 cents a share, on revenue of $15 million, according to Reuters Estimates.

Shares of the Waterloo, Ontario-based company closed at C$9.01 Tuesday on the Toronto Stock Exchange. (Reporting by Amit Kumar in Bangalore; Editing by Gopakumar Warrier)