UPDATE 2-Nice Q4 profit beats forecasts, more growth ahead

Tue Feb 15, 2011 9:44am EST

* Q4 EPS ex-items $0.51 vs $0.49 forecast

* To repurchase up to $100 mln of its shares

* Sees 2011 revenue of $775-800 mln, EPS $1.96-2.06

* To buy CyberTech for $60 mln in cash

(Adds comments by CFO, analyst; share price reaction)

By Tova Cohen

TEL AVIV, Feb 15 (Reuters) - Nice Systems (NICE.O) posted a higher than expected fourth-quarter profit as demand rose for its digital recording products for business compliance and risk management and said it sees further growth in 2011.

"What marked this quarter was very strong demand for our products," Chief Financial Officer Dafna Gruber told Reuters.

"We collected a lot of bookings and a record backlog. Usually the fourth quarter is our best quarter and this year we exceeded even our expectations," she said.

In particular Nice's enterprise business, both for call centres and compliance and risk products, saw strong demand.

"It's also due to the fact that we gained market share and took business from our competitors," Gruber said, adding that the average size of Nice's deals also rose.

Nice (NICE.TA) also has a security and video surveillance business, which accounts for about 23 percent of revenue.

Earlier on Tuesday, Nice said it would buy CyberTech International, a Dutch provider of compliance recording systems, for $60 million in cash. [ID:nPnNE48417]

Gruber said CyberTech, which sells to small and medium size businesses, will strengthen Nice's market position. "We're buying a competitor but are also adding complementary solutions," she said. "It will help us address the low-end part of the market. Nice was focused on high-end customers."

The company, armed with $663 million in cash, is still in the market for even larger acquisitions.

"We have a large pipeline of companies we are looking at," Gruber said.

RECORD REVENUE

Fourth-quarter earnings per share excluding special items increased to 51 cents from 45 cents a year earlier. Revenue rose to $187 million from $163 million. [ID:nPnUKTU699]

Analysts had estimated Nice would earn 49 cents a share excluding items on revenue of $180 million, according to Thomson Reuters I/B/E/S. The company in October had forecast quarterly revenue of $177-$182 million and EPS ex-items of 47-51 cents.

Nice's shares were up 0.9 percent at 127.7 shekels in late trade in Tel Aviv.

"We expect 2011 to be another year of growth," President and Chief Executive Zeevi Bregman said. "We are entering the year with a strong backlog and pipeline, a comprehensive product portfolio and a business that is driven by multiple growth engines."

SHARE BUYBACK

Nice said its board has authorised a programme to repurchase up to $100 million of its shares, which Bregman said reflected the company's confidence in its future and the sustainability of its strong cash generation.

The CyberTech acquisition is expected to add $25 million to Nice's 2011 revenue and be accretive to EPS.

For 2011, Nice expects revenue of between $775 million and $800 million and EPS excluding items in the range of $1.96 to $2.06, which compares with analysts forecasting $2.02.

Analyst Tal Shirizly at Psagot brokerage said the positive momentum in Nice's operations was continuing.

"The forecast meets expectations but does not substantially beat the market's estimates, which could lead to some profit taking in the short term," he said, adding that investors should take advantage of any dip in the share price.

For the first quarter Nice forecast revenue of $179 million to $183 million and EPS excluding items of 43 to 47 cents. (Editing by Greg Mahlich)

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