Shengkai Innovations tops estimates as ceramic valve demand motors
Shengkai Innovations (NASDAQ:VALV), a Chinese ceramic valve manufacturer, said Friday it swung into a second quarter profit as all its segments posted double-digit revenue growth.
Net income for the period was $14.9 million, or 42 cents per diluted share, compared to a net loss of $22.2 million, or 98 cents a share, for the second quarter of fiscal 2010.
Adjusted earnings, which exclude non-cash items like share-based compensation and asset gains, were $8.5 million, or 24 cents per diluted share. Last year, the company had adjusted earnings of 4.4 million, or 13 cents per diluted share.
Revenues increased 78.4% year-over-year to $22.4 million, driven primarily by growth in the electric power and petrochemical segment.
The results topped analyst estimates of 21 cents a share on revenues of $22.3 million.
Revenue from the electric power segment grew 84.5% to $16.0 million while revenue from the petrochemical segment grew 71.4% to $5.3, helped by new customer gains.
"As China's industrial and urban development continues in the Central and Western regions, demand for our ceramic valves from the petrochemical sector may become one of our fastest growing areas," said Shengkai's CEO, Chen Wang.
Meanwhile, revenues from other industries increased 38.6% to approximately $1.1 million.
Gross margin were 59.2%, up from 58.8% a year earlier.
The company reiterated it expects to earn revenues between $93 million and $95 million for fiscal 2011. Adjusted earnings are expected to be between $30 million and $32.0 million.
Since the announcement, the company's shares have rallied 7.5% to trade at $5.75 as of 10:18 am EST.
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