(Adds CEO and analyst comments, background; updates shares)
By Abhirup Roy
March 4 (Reuters) - British TV decoder maker Pace Plc (Other OTC: PCMXF - news) posted a 22.5 percent rise in full-year core earnings,driven by soaring demand for its next-generation media serversin North America, and the company forecast 2014 revenue aboveanalysts' estimates.
Shares in Pace rose as much as 11 percent on Tuesday, makingthe stock one of the top percentage gainers on FTSE-250 Midcapindex.
Pace, whose customers include Comcast Corp, AT&T (Berlin: SOBA.BE - news)Inc and DirecTV (Frankfurt: DIG1.F - news) , said it expected revenue of about$2.70 billion this year, with an operating margin of around 8.5percent.
Analysts on average were expecting 2014 revenue of $2.60billion, according to Thomson Reuters I/B/E/S.
Pace has seen a significant rise in earnings over the past18 months as more consumers in North America look to sharecontent between multiple devices.
Media servers connect TV and internet broadband content withany screen at customers' homes, including smartphones, laptops,set-top boxes and tablets.
"Because of this pressure of trying to gather moreconsumers, everyone (Pace's customers) is moving very veryquickly around technology, and I don't see this slowing down forthe next couple of years," Chief Executive Mike Pulli toldReuters.
The global market for set-top boxes totalled $4.6 billion inthe fourth quarter of 2012, market research firm InfoneticsResearch said in a report in April. This market is expected togrow to $26 billion by 2017. (http://link.reuters.com/fax37v)
Pace replaced Cisco Systems Inc (NasdaqGS: CSCO - news) as the leader ofthe global set-top box market by revenue in the second quarterof 2013, Infonetics said in another report last October. (http://link.reuters.com/byw37v)
Pace said adjusted earnings before interest, tax, andamortisation (EBITA) rose to $193.6 million for the year endedDec. 31 from $158.1 million, a year earlier.
Revenue increased 2.7 percent to $2.47 billion.
Revenue in North America, which accounts for more than 60percent of the company's total revenue, rose 16.9 percent.
Pace said in January that it expected adjusted EBITA to riseto at least $190 million, on revenue of $2.46 billion.
The Yorkshire, Northern England-based company had raised itsfull-year forecast in July after first-half profit more thantripled.
Operating margin rose 1.2 percentage points to 7.8 percent.
Barclays (LSE: BARC.L - news) raised its rating on Pace's stock last month,saying it expected the company's margins to grow more than 10percent, helped by the acquisition of U.S.-based network gearmaker Aurora Networks Inc in October.
Pace bought Aurora for $310 million in a bid to diversifythe products it provides to cable customers.
"Acquisitions won't stop there - we expect them to do moreof the same on a near annual basis," Jefferies analyst LeeSimpson wrote in a note.
Pace said it could look at regions such as eastern Europe,India, the Middle East and Africa for expansion.
The company raised its final dividend by 20 percent to 3.66cents per share, taking full-year dividend to 5.49 cents.
Pace's shares, which had risen 77 percent in the year toMonday's close, touched a high of 446.9 pence on Tuesday.
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