UPDATE 1-Photon sees better-than-expected Q2 results

(Recasts; adds details, share movement)

Feb 7 (Reuters) - Photon Dynamics Inc (PHTN.O: Quote, Profile, Research) posted a quarterly loss narrower than analysts estimated and forecast better-than-expected second-quarter results on strength in the flat panel display market, driving its shares up 11 percent in after-hours trade.

"Panel demand continues to be strong, panel pricing has firmed, and customers are responding by adding capacity...," Chief Executive Jeffrey Hawthorne said in a statement.

For the second quarter, the flat-panel production tools maker expects a loss of 5 cents to 11 cents a share, on revenue of $36 million to $38 million.

Analysts on average were expecting a loss of 14 cents a share, on revenue of $23.8 million, according to Reuters Estimates.

For the first quarter, the company posted a loss of $8.2 million, or 46 cents a share, on revenue of $16.2 million. Photon Dynamics said the loss included charges of $2.5 million.

Analysts expected the company to post a loss of 47 cents a share, on revenue of $16 million.

Shares of the company rose to $9.25 in trading after hours, after closing at $8.30 Thursday on the Nasdaq. (Reporting by Swagata Gupta in Bangalore; Editing by Vinu Pilakkott)