November 23, 2010 / 1:06 PM / 7 years ago

UPDATE 2-Daktronics sees Q3 profit as ad spending recovers

3 Min Read

* Q2 EPS $0.17 vs est $0.06

* Q2 rev $126.9 mln vs est $105 mln

* Shares rise 14 pct (Adds conference call details, background, share movement)

BANGALORE, Nov 23 (Reuters) - Electronic scoreboard and billboard maker Daktronics Inc (DAKT.O) said it expects to swing to a third-quarter profit as a recovery in outdoor advertising spending gives a significant boost to sales.

Daktronics, whose main customers are outdoor advertisers Lamar Advertising Co (LAMR.O) and Clear Channel Outdoor Holdings Inc (CCO.N), posted losses in the back half of the last fiscal year as firms cut down on advertising and marketing.

"The outlook for orders from our two largest billboard customers for 2011 is very positive, which we see as indicative of the overall outlook for the outdoor advertising industry," Chief Executive Jim Morgan said on an analyst call.

Daktronics expects its market share in the billboard market to be consistent with levels seen two years ago.

Lamar Advertising, which turned profitable after seven quarters of loss, and Clear Channel posted a five percent rise in quarterly sales. [ID:nSGE6A30HJ] [ID:nASA010OM]

"Unlike last year, there are projects moving forward in professional baseball for this coming season, and we have had good success to date in winning our share of those projects," Daktronics CEO Morgan said in a statement.

Brookings, South Dakota-based Daktronics' backlog rose 34 percent to $121 million in the second quarter and the pipeline at its fast-growing international segment continues to be strong.

For the second quarter, the company earned $7 million, or 17 cents a share, compared with $4.8 million, or 12 cents a share, last year. [ID:nASA014T8]

Daktronics shares, which have risen 60 percent since the quarterly results in August, rose 14 percent to $14.50, the highest in about two years. They were trading at $13.24 in afternoon trade on Tuesday on Nasdaq.

More than 774,000 shares had changed hands by 1830 GMT, about three times the stock's ten-day-moving average volume. (Reporting by Saqib Iqbal Ahmed in Bangalore; Editing by Don Sebastian)

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