Information Technology service provider VanceInfo Technologies Inc. (VIT) reported Wednesday an increase in the first-quarter profit, helped by thriving business with existing and new clients in a seasonally weak quarter. The company also provided earnings guidance for the second quarter, in concurrence with analysts' expectations. VanceInfo raised its outlook for fiscal 2009, above the Street view.
For the fourth quarter, net income rose 26.6% to $3.8 million or $0.10 per share from $3.0 million $0.08 per share in the previous year.
Share-based compensation expense for the latest quarter was $333 thousand, compared to $346 thousand a year ago. Excluding the expense, net income increased to $4.2 million or $0.10 per share from $3.4 million or $0.08 per share in the year-ago period.
Net revenues for the quarter climbed 46.8% to $30.1 million from $20.5 million a year ago, chiefly because of continued growth of business with existing key clients and expansion of customer base.
On average, four analysts polled by Thomson Reuters expected the company to report earnings of $0.10 per share, on revenue of $27.81 million, in the first quarter. Analysts' estimates typically exclude special items.
R & D Outsourcing Services revenue grew 48.3% to $19.2 million $12.9 million. Revenue from IT Services increased 44.1% to $10.9 million from $7.6 million last year, mainly due to a 76.5% year-over-year growth in application development and maintenance services.
Chris Chen, Chief Executive of VanceInfo, said, "While the seasonal effect and the economic downturn had a visible impact on some of our businesses, we see continued growth momentum from our Chinese and European clients."
General and administrative expenses went up 46.1 % to $6.3 million from $4.3 million, while sales and marketing costs increased 6.2% to $1.04 million from $0.98 million in the same period last year.
Operating income increased 65.7% year-over-year to $4.3 million from $2.6 million. Operating margin expanded to 14.4% from 12.7% in the prior-year quarter, partly attributable to VanceInfo's cost saving measures as well as a government grant relating to the company's training of new employees with college degrees.
Looking ahead to the second quarter, VanceInfo expects to post earnings of $0.10 - $0.11 per share, on net revenues ranging from $31 million to $32 million. Excluding share-based compensation, the company anticipates earnings to range from $0.11 - $0.12 per share for the same period. Analysts are looking for earnings of $0.11 per share.
For fiscal 2009, the company raised its earnings per share guidance to $0.46 - $0.48 from prior guidance of at least $0.46, and non-GAAP earnings outlook to $0.49 - $0.51 from previous guidance of at least $0.49. VanceInfo now expects to record revenue of at least $128 million compared to its prior guidance of $123 million for the full year.
Analysts currently forecast earnings of $0.48 per share on revenue of $126.91 million for the full year.
VIT closed Tuesday's regular trading session at $7.38 on the NYSE.
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