China Transinfo increases Q3 profits by 7%, but lowers full-year profit outlook
China TransInfo Technology Corp. (Nasdaq:CTFO), a provider of transportation and traffic information services, posted a 6.9% increase in its third quarter net income, but cut its adjusted profit forecast for the full-year.
For the third quarter, net income was $4.3 million, or $0.17 per diluted share, compared to $4.0 million, or $0.18 per share, in the same period of 2009.
Adjusted net income, which excludes compensation and amortization expenses, increased 16.4% year-over-year to $4.7 million, or $0.19 per diluted share.
Revenue jumped 82.8% in the period to $35.0 million, of which 79% of the increase was attributable to the rise in transportation sales resulting from the company's acquisition of UNISITS, which contributed $21.8 million in sales during the quarter.
Total sales backlog increased 29.4% to $110 million by the end of quarter from $85 million at second quarter-end.
However, gross margin declined to 30.2% from 38.4% in the year-ago quarter, resulting from the consolidation of UNISITS' financials, the company said. UNISITS' business involves more hardware components, which have lower gross margins when compared to the products and services of the company's non-UNISITS transportation business.
For fiscal 2010, the company continues to expect revenues of approximately $120 million. Despite this, it said it is lowering its full-year adjusted net income forecast from approximately $18 million to $16.5 million, as it anticipates an increase in expenses related to the expansion of its services business, as well as slower-than-expected gross margin improvement.
Operating expenses grew 74% year-over-year to $5.4 million.
At quarter-end, the company had cash and equivalents of $22.0 million.
China TransInfo, through its affiliate and operating subsidiaries, is focused on providing urban and highway transportation management and information services. The company was down more than 8% on Friday, trading at $5.34 as of 11:24am EST.
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