IT services firm VanceInfo Technologies Inc. (VIT) Tuesday reported an increase in net income for the second quarter, driven by a nearly 50% surge in revenues. Further, the company provided an outlook for the third quarter, and lifted both its adjusted earnings per share and revenue guidance for the full year.
The Beijing, China based company's net income for the quarter advanced 36.9% to US$7.19 million from US$5.25 million in the same quarter of last year. On a per share basis, earnings were US$0.17, higher than US$0.13 in the year-ago quarter.
However, net margin for the quarter dropped to 13.9% from 15.2% in the prior year quarter, hurt by higher effective tax rate and foreign exchange losses from the Euro receivable and cash balances.
Adjusted net income for the second quarter rose 47.2% to US$8.56 million or US$0.20 per share from US$5.81 million or US$0.14 per share in the comparable quarter of last year.
On average, five analysts polled by Thomson Reuters expected the company to earn US$0.19 per share in the quarter. Analysts' estimates typically exclude special items.
Net revenues were US$51.8 million in the second quarter, up 49.8% from US$34.6 million last year. The company attributed the increase to continued growth in business from the U.S., Europe and Greater China, including mainland China, Hong Kong and Taiwan, markets.
Analysts had a consensus revenue estimate for the quarter of US$48.25 million.
Meanwhile, gross margin for the quarter dropped slightly to 38.2% from 38.6% in the year-ago quarter, reflecting pricing adjustments from certain large U.S. customers since July 2009.
Looking ahead to the third quarter, the company said it expects earnings per share to be between US$0.15 and US$0.16. Adjusted net income for the quarter is estimated to be in the range of US$0.18 to US$0.19 per share. Analysts now project earnings of US$0.20 per share for the third quarter.
Revenue for the third quarter is anticipated to be in the range of US$53.5 million to US$54.5 million, representing a 33% to 36% increase from the corresponding period in 2009. Analysts are looking for revenues of US$52.54 million for the third quarter.
For the full year 2010, the company reaffirmed it earnings guidance in the range of US$0.66 to US$0.70 per share, and raised its adjusted earnings per share view to a range of US$0.77 to US$0.81, from the earlier estimate of between US$0.75 and US$0.79.
The company also lifted its revenue guidance for the full year and expects to report at least US$207 million in revenue, compared to its previous estimate in the range of US$192 million to US$205 million.
Current market view is for earnings per share of US$0.78 and revenues of US$202.78 million for the full year.
VIT closed Monday's regular trading at $26.21 per share on the NYSE.
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