STOCKS NEWS EUROPE-Pace rises on results, acquisition

Shares in Pace (PIC.L) gain 6.8 percent after the world's largest set-top box maker announces a 46 percent rise in first-half pretax profit, and the purschase of U.S. broadband technology firm 2Wire, which drives earnings upgardes from JPMorgan.

The company posts a pretax profit of 45.4 million pounds on 21 percent higher revenue of 635.2 million pounds in the six months to end-June, and says it was close to achieving its 8 percent operating-margin target.

The performance prompts JPMorgan to raise its 2010 and 2011 earnings per share forecasts by 7 percent and 2 percent respectively, and repeat its "overweight" stance.

"Results on a standalone basis and subsequent upgrade to earnings justify a re-rating of the shares to a level comparable with Pace's peer group," the broker says in a note.

Pace also says it has agreed to buy U.S. broadband technology firm 2Wire for $475 million to broaden its customer base beyond cable and satellite into the Internet TV market.

"The acquisition allows Pace to supply U.S. telcos ... and should strengthen Pace's position in convergent devices," says JPMorgan, which forecasts 2wire to be 12 and 18 percent accretive to earnings in 2011 and 2012, respectively.

For more double click on [ID:nLDE66P09S]

Reuters Messaging rm://david.brett.reuters.com@reuters.net