Friday, Zhongpin, Inc. (HOGS), a meat and food processing company in China, lifted its outlook for fiscal 2008, citing strong third-quarter revenues as well as anticipated strong performance in the fourth quarter.
The company now expects earnings per share for the fiscal year in the range between $1.15 and $1.19, considerably higher than the earlier earnings forecast of $0.98-$1.07. On average, two analysts polled by First Call/Thomson Financial expect the company to report earnings of $1.13 per share for the year.
For the year ending December 31, 2008, Zhongpin currently projects revenue to be between $550 million and $570 million. This compares to earlier provided outlook of $490 million to $520 million. Two Wall Street analysts are looking for revenues of $533.47 million for the full year.
The company expects gross margin for 2008 to be more than 12.7%, with net profit margin of at least 6.4%.
According to Zhongpin, the guidance, which excludes the impact of any future acquisitions, has been revised upwards to reflect the strong revenue growth during the third quarter, as well as on the expectations of a strong performance in the upcoming peak season in the fourth quarter. The company attributed its third-quarter revenue growth to the commencement of production at its new plant in Luoyang city, which began production in the beginning of the third quarter.
Xianfu Zhu, chief executive officer, commented, "During the third quarter, we experienced robust growth in our sales volume due to lower pork prices and additional capacity from the Luoyang plant." Zhongpin specializes in pork and pork products, and fruits and vegetables.
Zhu added, "We expect to close the year with strong performance since the first and the fourth quarters are typically peak seasons in our industry and we expect the Luoyang plant to continue to make a meaningful contribution. As we continue to experience strong revenue growth and increased efficiency in our operations, we are confident in our ability to achieve our guidance for 2008."
HOGS closed Thursday's regular trading on Nasdaq at $6.81.
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