Rising demand for net-enabled mobile phones should revive the fortunes of electronics company Filtronic after it posted a pre-tax loss of £3.9m, according to its chairman.

Shares in the company, which makes electronic components for mobile handsets and military weapons, rose 40p to 887.5p as house broker Cazenove & Co said it expected the company to report a pre-tax profit of £15m in 2001.The company delivered a £12.5m pre-tax profit in 1999.

Filtronic's 2000 earnings suffered a slowdown because of reduced component sales in its wireless infrastructure division because of product launch delays at big US customers Motorola and Lucent.

Earnings were also dragged into the red by the growing interest bill Filtronic has on a $170m high-yield debt which matures in December 2005.

Sales in the year rose 18.7% to £222.3m. The company has five divisions of which the largest two, wireless infrastructure and cellular handset products, account for 85% of the group's turnover.

Filtronic expects the growth in third generation mobile phones in the next few years and its strong position in internal antennas for mobiles to drive profit growth.

Professor David Rhodes, executive chairman of Filtronic, said: "The growth prospects of our new business areas, together with those of the more established businesses, give the board great confidence that Filtronic will provide its shareholders with outstanding and sustainable growth."

The group's £30m spend on opening its semiconductor factory in Newton Aycliffe, Co Durham, is also expected to drive growth in the next 12 months as the company begins to announce contract wins. Analysts said semiconductor business had not been factored in to current valuations.

Filtronic's share price has fallen from more than £23 in February.