E-House China earnings takes a hit amid house purchase restrictions by Chinese government
E-House China Holdings (NYSE:EJ), a Chinese real estate services company, said Thursday its fourth quarter earnings attributable to shareholders fell 67% amid efforts by the Chinese government to cool down the Chinese housing market.
To that end, the Chinese government said in January it was limiting the number of houses individuals can buy and second home purchases would require a 60% downpayment.
"We believe that these measures, coupled with continued tightening of the overall monetary policy by China's central bank, will likely have a substantial and negative impact on real estate sentiment and transaction volume," said E-House's executive chairman, Xin Zhou.
For the fourth quarter ended December 31, net income attributable to E-House's shareholders was $12.9 million, or 16 cents per diluted American Depositary Receipts (ADS), down from $39 million, or 49 cents per diluted ADS, for the year ago period. Total revenues were $125.2 million, up 7% from $117.1 million.
Analysts polled by Thomson Reuters expected the company to earn a profit of 28 cents a share on revenues of $116.8 million.
Revenues from the company's primary real estate agency fell 6% to $59.6 million while revenues from secondary real estate brokerage services were cut by half to $6.8 million. On a brighter note, revenues from the real estate information services segment rose 53% to $58 million.
For the first quarter of 2011, the company expects revenues to be in the range of $80 million to $82 million.
The company also announced a cash dividend of 25 cents per share payable in April.
Since the announcement, the company's shares fell roughly 0.5% to trade at $11.73 as of 3:49 pm EST.
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