(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 servers in North America, and the company forecast 2014 revenue above analysts' estimates.
Shares in Pace rose as much as 11 percent on Tuesday, making the stock one of the top percentage gainers on FTSE-250 Midcap index.
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 8.5 percent.
Analysts on average were expecting 2014 revenue of $2.60 billion, according to Thomson Reuters I/B/E/S.
Pace has seen a significant rise in earnings over the past 18 months as more consumers in North America look to share content between multiple devices.
Media servers connect TV and internet broadband content with any screen at customers' homes, including smartphones, laptops, set-top boxes and tablets.
"Because of this pressure of trying to gather more consumers, everyone (Pace's customers) is moving very very quickly around technology, and I don't see this slowing down for the next couple of years," Chief Executive Mike Pulli told Reuters.
The global market for set-top boxes totalled $4.6 billion in the fourth quarter of 2012, market research firm Infonetics Research said in a report in April. This market is expected to grow to $26 billion by 2017. (http://link.reuters.com/fax37v)
Pace replaced Cisco Systems Inc (NasdaqGS: CSCO - news) as the leader of the global set-top box market by revenue in the second quarter of 2013, Infonetics said in another report last October. (http://link.reuters.com/byw37v)
Pace said adjusted earnings before interest, tax, and amortisation (EBITA) rose to $193.6 million for the year ended Dec. 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 60 percent of the company's total revenue, rose 16.9 percent.
Pace said in January that it expected adjusted EBITA to rise to at least $190 million, on revenue of $2.46 billion.
The Yorkshire, Northern England-based company had raised its full-year forecast in July after first-half profit more than tripled.
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 10 percent, helped by the acquisition of U.S.-based network gear maker Aurora Networks Inc in October.
Pace bought Aurora for $310 million in a bid to diversify the products it provides to cable customers.
"Acquisitions won't stop there - we expect them to do more of the same on a near annual basis," Jefferies analyst Lee Simpson 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 3.66 cents per share, taking full-year dividend to 5.49 cents.
Pace's shares, which had risen 77 percent in the year to Monday's close, touched a high of 446.9 pence on Tuesday.