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China Information Security Technology Q2 profit climbs on strong revenue growth; maintains FY08 Outlook August 15, 2008

Posted by Bahadir Sahin in English, Haber (News).
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Technology Inc. (CPBY: News, Chart, Quote ) said late Monday that profit for the second quarter climbed from last year on strong revenue growth, helped by revenues from acquisitions as well as product and geographical expansion. The company also maintained its forecast for fiscal 2008.

The Shenzhen, China-based public security and Geographic Information System services provider reported second quarter net income of $7.05 million or $0.15 per share, higher than $4.56 million or $0.11 per share in the prior-year quarter.

Excluding stock-based compensation and amortization, pro forma net income rose to $7.66 million or $0.17 per share from $4.56 million or $0.11 per share in the year-ago quarter. On average, three analysts polled by First Call/Thomson Financial expected earnings of $0.15 per share for the second quarter.

Revenues for the second quarter jumped to $24.71 million from $5.41 million in the same quarter last year, while pro forma revenues climbed 134.6% to $24.71 million from $10.53 million and breezed past three Wall Street analysts’ consensus estimate of $22.48 million.

Increase in revenues was attributable to acquisitions of Information Security Software, Bocom Technology and Geo, product and geographical expansion, as well as the launch of several large-scale systems integration projects. The company also signed new contracts with over twenty provinces and provincial cities in China.

Pro forma income from operations for the quarter more doubled to $8.28 million from the same period in 2007. As a percentage of revenues, it decreased 5.9 points to 33.5% from last year, due to higher costs for procured hardware and other subcontracting costs related to the implementation of several large-scale systems integration projects, and the increase in expenses due to expansion.

Pro forma gross profit for the second quarter was $11.1 million, up 103.6% from the year-ago quarter, while gross margin percentage declined 6.9 points to 45.1% from last year, due to higher costs for procured hardware and other subcontracting costs related to the implementation of several large-scale systems integration projects.

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