Datum Sees Quarterly Gain Much Higher Than Estimated

Datum Inc., with strong sales in its core segments, will beat analysts’ estimates for the second quarter by a wide margin, Chief Executive Erik van der Kaay said Thursday.

The Irvine company should post earnings of 14 to 16 cents a share, he said, compared with analysts’ estimates of 6 cents a share.

The company, which makes high-performance products for telecommunications companies, also expects revenue to rise more than 30% to about $33 million.

“Our core businesses across the board are doing really well,” van der Kaay said in an interview. “The wireless markets are extremely strong.”

In the first quarter, Datum reported earnings of 5 cents a share on revenue of $28.9 million.

Datum’s main products are small, extremely stable atomic clocks that allow telecommunications traffic to move across wireless and wired networks. The devices are used in base stations around the world.

With the migration worldwide to third-generation wireless networks, data and Internet traffic will increase the load on infrastructure, requiring more synchronization. The increased use of wireless traffic will also require that calls be transferred smoothly from one base station to the next.

Datum already counts Motorola Inc. and Lucent Technologies Inc. as customers but hopes to win contracts soon with L.M. Ericsson Telephone Co. and Nokia Corp.

“There’s just a tremendous amount of business opportunity for us,” van der Kaay said.

He said the company has spent a good deal of its resources developing cheaper atomic clocks. As a result, Datum’s margins should improve to about 47% in the second quarter from about 42% in the first quarter.

The company will likely raise expectations for the full year from the current First Call/Thomson Financial consensus of 38 cents a share.

The lower prices for the atomic clocks will also give Datum an advantage entering the European market.

The company expects its wire-line business to grow 50% in the second quarter over the same period a year ago.

Datum also has developed a technology for “time stamping” data, which could become increasingly important as more business is conducted over the Internet.

“My guess is, within five years a form of time stamp will be attached to every e-mail,” van der Kaay said.

Datum will report second-quarter earnings Thursday.