Cast resin transformers maker Jinpan International Ltd. (JST) reported Tuesday an increase in third-quarter profit, helped by lower raw material costs. The company also provided an earnings guidance for fiscal 2009, while maintaining its revenue guidance.
For the third quarter, net income rose to US$9.36 million or US$1.15 per share from US$5.16 million or US$0.63 per share in the previous year.
Operating income was $9.8 million, up 34.0% increase from $7.3 million in the same period last year.
Net sales for the quarter dipped 1.8% to US$43.90 million from US$44.72 million, mainly due to reduction of material costs being passed on to customers in the form of lower unit prices.
Gross profit for the three-month period rose 37.1% to $19.2 million from $14.0 million. Gross margin went up to 43.7% from 31.4% as the company benefited from a lower cost of sales on an absolute basis because of lower raw material prices.
Commenting on the results, Zhiyuan Li, Chief Executive of Jinpan, said, "Jinpan recorded favorable gross margins of 43.7% because of lower raw materials prices on a year over year basis. For the fourth quarter of 2009, we believe gross margins will be closer to the levels of 34% - 37%."
Selling, general and administrative expenses increased year-over-year to $9.4 million from $6.7 million, chiefly because of increase in R&D expenses and additional overhead costs at the company's Wuhan facility, which was not fully operational in 2008, and at the Shanghai facility, which was not operating during the third quarter in fiscal 2008.
For the nine-month period, net income surged to US$22.73 million or US$2.80 per share from US$13.58 million or US$1.67 per share in fiscal 2008. Sales grew 20% to US$117.19 million from US$109.13 million in the same period in fiscal 2008.
Looking ahead, for the full year 2009, the company now estimates net income to be about $28 million - $29 million. The company sees earnings per share to range from $3.40 to $3.54. Jinpan also reiterated its full-year net sales outlook of $154 million - $159 million.
JST is currently trading at $... on the NYSE.
For comments and feedback: editorial@rttnews.com