Tekelec announced its first-quarter earnings this week and posted a 51% revenue increase over the same quarter last year and a 3% increase from last quarter.

Leading the growth in Tekelec's $119.4 million quarterly earnings was its Switching Solutions Group, which grew revenue 22% from last quarter to $24.8 million. The group now claims 225 customers after adding 28 new customers during the quarter. The company also extended its switching relationship with US LEC, which purchased the company's T9000 product in late 2003 to provide Class 4 and Class 5 services.

"This expanded relationship provides further validation for the quality of Tekelec's product offerings and demonstrates our ability to grow our switching relationships as customers become confident with our switching solutions," said Fred, Lax president and CEO of Tekelec.

Orders for products and services were up over 40%.

Tekelec's Network Signaling Group grew revenue by 24% to $74.4 million. It is the company's highest first-quarter signaling revenue in its history, thanks in part to deals such as the one with BellSouth Long Distance, which bought Tekelec's Eagle 5 Signaling Applications System with integrated local number portability.

On the software side, the Communications Software Solutions Group generated $9.5 million. During the quarter, Tekelec introduced a new suite of applications called Integrated Application Solutions and announced a sale for it with Syniverse Technologies.

Approximately 24% of sales during the quarter came from outside the U.S. Orange Caribbean, a mobile operator in the French West Indies and Guyana, has purchased Tekelec's Eagle 5 platform to provide signaling in its GSM network. The purchase also includes Tekelec's number portability solution, as well as the equipment identity register feature which addresses fraud.

IRG Research senior analyst Erik Zamkoff said Tekelec is one of his best-positioned stocks and reiterated his buy rating based on its performance in the quarter.

"The core signaling business should remain strong, driven by international expansion, share gains, and growth in wireless traffic. The switching business continues to accelerate; and margins rose above 50%," Zamkoff said in his report.