UPDATE 1-M-Flex posts surprise quarterly profit; shares up

(Recasts, adds outlook, details)

Nov 5 (Reuters) - Multi-Fineline Electronix Inc (MFLX.O), which makes flexible printed circuits used in consumer electronic devices, posted a surprise quarterly profit as sales to its second-largest customer surged, sending its shares up more than 25 percent.

Sales to Sony Ericsson Mobile Communications, which accounted for 39 percent of the company's fourth-quarter sales, rose 376 percent during the quarter, the company said.

Sales to top customer Motorola Inc (MOT.N) fell 25 percent.

Net income for the fourth quarter increased 36 percent to $3.0 million, or 12 cents a share, compared with analysts' expectation of a loss of 4 cents a share.

Net sales rose 51 percent to $166.7 million. Analysts on average had expected revenue of $118.3 million, according to Reuters Estimates.

The company, which is also known as M-Flex, said it expects moderate sequential increase in sales for the first quarter of fiscal 2008 and to return to a gross margin range of 10 percent to 15 percent in the first half of fiscal 2008.

Gross margin for the fourth quarter fell to 8.5 percent compared with 10.8 percent in the year-ago quarter.

Sony Ericsson Mobile Communications, a joint venture by Sony Corp (6758.T) (SNE.N) and Ericsson (ERICb.ST), was the company's second-largest customer after Motorola, according to its most recent 10-Q filing.

In October, Motorola reported a 94 percent fall in third-quarter profit as the company lost cell phone market share to rivals Nokia (NOK1V.HE) and Samsung Electronics (005930.KS).

Shares of Anaheim, California-based M-Flex were trading up $3.77 at $18.51, making it the top percentage gainer in late morning trade on the Nasdaq. (Reporting by Mehul Shah in Bangalore)