iSoftStone Holdings Limited's (ISS) net income decreased 39.0% to $3.6 million in the second quarter 2012 from $5.9 million in the second quarter 2011. The decrease in net income was primarily due to a $5.5 million gross profit increase as we continued to grow our revenues, offset by a $6.9 million increase in operating expenses and increased interest expenses and income taxes. Earnings per ADS were $0.06 in the second quarter 2012 and $0.10 in the second quarter 2011.
Non-GAAP earnings per ADS were $0.14 in the second quarter 2012 and $0.13 in the second quarter 2011.
Net revenues increased 37.4% to $92.0 million in the second quarter 2012 from $67.0 million in the second quarter 2011, mainly due to strong demand for IT services from customers from both Greater China and the United States.
Analysts polled by Thomson Reuters expected the company to report earnings of $0.14 per share on revenues of $90.34 million for the second-quarter. Analysts' estimates typically exclude special items.
For the third quarter 2012, iSoftStone expects Net income to be at least $6.3 million, Non-GAAP net income of at least $10.0 million, and net revenues of at least $98.0 million. Non-GAAP earnings per ADS for the third quarter 2012 is expected to be at least $0.17. Analysts expect the company to report earnings of $0.21 per share on revenues of $98.01 million for the third-quarter.
For the full year 2012, iSoftStone now expects net income to be at least $23.0 million, Non-GAAP net income of at least $39.0 million, Non-GAAP earnings per ADS of at least $0.65, and net revenues of at least $386.5 million. Analysts expect the company to report earnings of $0.72 per share on revenues of $382.16 million for fiscal 2012.
Earlier, the company expected net income for 2012 to be at least $31 million. On a non-GAAP basis, net income was expected to be at least $45 million and earnings per ADS was expected to be at least $0.73. Net revenues in 2012 were expected to be at least $382 million.
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