UPDATE 1-Savvis Q4 loss narrows; shares up

* Q4 share loss $0.06 vs est $0.21

* Q4 rev $252.7 mln vs est $248.6 mln

* Sees FY 2011 rev $1.03-$1.06 bln vs est $1.05 bln

Feb 8 (Reuters) - Information technology service provider Savvis Inc SVVS.O reported a narrower-than-expected fourth quarter loss as margins rose and costs decreased, sending its shares up 9 percent in morning trading.

The company, which provides online storage and data centre support for companies switching to cloud computing, reported a quarterly loss of $2.9 million, or 6 cents per share, lower than $5.4 million, or 10 cents per share, loss it reported last year.

Analysts on average expected a 21 cents per share loss, according to Thomson Reuters I/B/E/S.

October-December revenue rose 15 percent to $252.7 million, helped primarily by a 20 percent increase in hosting income, compared with analysts’ estimates of $248.6 million.

For 2011, the company projected revenue of $1.03-$1.06 billion, the higher end of which topped Wall Street expectations of $1.05 billion.

Shares of the company have gained 20 percent in the last 10 days on speculation over a potential buyout. [ID:nN28282267]

Data centre operators -- an important part of the fledgling cloud computing infrastructure -- have seen a spurt of deals in the last one year, the latest being Verizon Communications' VZ.N buy of Terremark Worldwide TMRK.O.

Savvis shares were up a percent at $32.49 in morning trade on Tuesday on Nasdaq. (Reporting by Himank Sharma in Bangalore; Editing by Sriraj Kalluvila)