UPDATE 2-Tandberg Q1 profits rise, near forecasts

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OSLO, April 17 (Reuters) - Norwegian video conference systems maker Tandberg (TAA.OL: Quote, Profile, Research) posted a 28 percent rise in first-quarter profits on Thursday, roughly in line with forecasts, and said it expected product prices to keep rising.

Earnings before interest and tax (EBIT) rose to $37.4 million for January-March from $29.2 million in the same quarter a year earlier.

The result was just below an average expectation of a rise to $38 million in a Reuters poll of 12 analysts, whose estimates ranged from $34 million to $40 million.

"The company's solid performance in the first quarter reflects the increasing importance of video communication for our customers and our strategic partners," Chief executive Fredrik Halvorsen said in a statement.

Tandberg dominates the video conference systems market in a near duopoly with U.S. rival Polycom (PLCM.O: Quote, Profile, Research) which on Wednesday reported a smaller-than-forecast 39 percent rise in first-quarter profit as revenue jumped due to an acquisition.

Tandberg's first-quarter revenues rose 38.7 percent to $178.1 mmillion, slightly lagging analysts' average expectation of $180 million but was within the range of estimates.

"We are happy with 39 percent growth," Halvorsen said in a conference call for analysts and reporters.

Tandberg sold 15,077 units in the first quarter, up from 12,866 in the same quarter last year. Gross margin for the quarter was 65.6 percent, down from 67.2 percent in the same quarter last year.