UPDATE 2-Align Tech posts Q1 profit, shares hit life high

(Adds CEO comment, updates share movement)

By Himani Sarkar

BANGALORE, April 26 (Reuters) - Align Technology Inc. (ALGN.O) on Thursday reported a surprise first-quarter profit and raised its 2007 outlook, sending the teeth straightening technology provider's shares to their life-time high.

The growth came mainly from strong demand for its Invisalign technology from existing doctors, Chief Executive Thomas Prescott said.

"We actually were able to substantially grow our volume of cases and our top-line expanded 30 percent over last year," Prescott said by phone from the company headquarters in Santa Clara, California.

Align earned 10 cents a share, including a charge of 1 cent, on a revenue of $63.8 million. Analysts on average expected a loss of 1 cent on revenue of $58.5 million, according to Reuters Estimates.

The company now sees 2007 earnings of 46 cents to 55 cents a share before items and revenue of $268.4 million to $278.0 million. It had earlier forecast 15 cents to 27 cents a share on revenue of $240 million to $255 million.

Align shares, which were up more than 32 percent at $23.37 in late afternoon trade, were the highest gainers on the Nasdaq Thursday.

MARKET DEVELOPMENT

The company was earlier facing pricing compression and significant legal spending over its patent claims with rival OrthoClear Holdings Inc.

In September, the two companies agreed to settle their claims. OrthoClear agreed to transfer its patents to Align and stop treating new patients in the United States.

As a result, the company's spending has gone down and more funds have now been redistributed to market development, expansion and research and development, CEO Prescott added.

The result showed the opportunity for the company after the removal of the key competitor, Roth Capital Partners analyst Matt Dolan said in a note to clients.

"We believe this momentum should continue over the next several quarters." (Additional reporting by Anant Vijay Kala)