UPDATE 2-Nice sees profit grow, to start paying dividends

Wed Feb 13, 2013 10:47am EST

* Q4 non-GAAP earnings per share $0.70 vs estimate of $0.66

* Sees 2013 non-GAAP earnings per share $2.55 to $2.65

* Board approves dividend plan of $0.16 shr per qtr

* Shares slide in Tel Aviv, flat in morning Nasdaq trade

By Steven Scheer

TEL AVIV, Feb 13 (Reuters) - Israel-based software provider Nice Systems projected revenue and profit growth in 2013 after quarterly profit topped estimates and said it would start paying quarterly dividends.

Nice has benefited from growing demand for tools to delve into large amounts of data as companies look to improve their businesses, spot fraud and fend off security threats.

Chief Financial Officer Dafna Gruber said the group expected 2013 to be a year of profitable growth after strong orders in the fourth quarter.

But a weaker-than-expected full-year forecast sent Nice shares down to close 5.4 percent lower in afternoon trading in Tel Aviv. Its Nasdaq shares were flat at $37.02 in morning trade. As of Tuesday's close, both are up about 11 percent so far this year.

Nice estimated 2013 revenue of $940-$970 million and adjusted earnings per share on a diluted basis of $2.55-$2.65 - a seven percent rise in revenue and five percent in profit.

"We wanted to take a cautious approach at this point," Gruber said of the outlook, adding that it was likely that the second half would be stronger than the first.

"It's not a great performance to say the least," said Daniel Meron, an analyst at RBC Capital Markets. "The upbeat commentary is not consistent with the lighter-than-expected guidance."

But Shaul Eyal, an analyst at Oppenheimer & Co said the combination of fourth-quarter results, the announcement of a dividend policy and the appointment of a new chairman with a strong banking and mergers and acquisition background will enable Nice to "sustain the positive momentum the shares have been showing in recent months".

Nice said board member David Kostman was appointed chairman, replacing Ron Gutler, chairman since 2002.

Gruber said Nice's analytics segment - where tightening compliance requirements in finance, energy and other sectors had boosted business - was the fastest growing area and accounted for more than half of new business in the fourth quarter.

"The company is shifting towards selling more and more analytical-based applications," Gruber told Reuters. "The continued focus on regulation and compliance has had a favourable impact on our business."

Nice also makes sure call centres work efficiently, while its systems aid in surveillance for security forces trying to protect buildings and transport networks against attack.

Boosted by a tax benefit, interest income and a smaller share count following a buy-back programme, Nice earned 70 cents a share excluding items in the fourth quarter, up from 60 cents a year earlier as revenue excluding items rose 12 percent to a record $240 million.

Analysts on average expected adjusted earnings of 66 cents per share on revenue of $246 million, according to Thomson Reuters I/B/E/S.

For the first quarter of 2013 Nice expects revenue excluding one-time items to be in a range of $220 million to $230 million and EPS excluding items to be in a range of 57 to 62 cents. That is below expectations of $234 million in revenue and EPS of 62 cents.

Nice said it expected its initial annual dividend to be 64 cents a share, or 16 cents quarterly. The first payment is expected to be in the second quarter of 2013.

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