Comtech Group's Q3 earnings beat the Street by penny
Comtech Group, Inc. (Nasdaq: COGO), provider of customized designs for the technology manufacturing sector, reported third-quarter earnings after Thursday’s close that beat analysts’ estimates by a penny.
For the third quarter ended Sept. 30, the Chinese small cap recorded net income of $7.1 million, or $0.18 per share, a penny above the Thomson mean estimate of $0.17 per share. The current quarter’s bottom-line results represent an increase of 28.6% per share over the $4.8 million, or $0.14 reported for the third quarter of 2006.
The company booked revenue of $56.1 million, up 30% from revenue of $43.2 million reported during the third quarter of 2006. Thomson revenue view $55.80 million
The company said it experienced strong growth in its three key product categories: digital media, mobile handsets and telecommunications equipment. The company’s mobile handset business, in particular, accounted for over 40% of the firm’s total revenue for the quarter, fueled by robust consumer spending in China. The company said it believes consumer spending power in China will continue to grow at a rapid pace.
Comtech also said that it entered the education technology market during the quarter with a customized module for learning devices.
Looking ahead, management upwardly revised its 2007 full year guidance to revenue of $221 million in revenue from previous revenue guidance of $220 million. Ten analysts polled by Thomson Financial are on average anticipating sales of $219.25 million for the full year.
The company guided for earnings of $0.70 per share, up from previous guidance of in $0.69 per share. The earnings guidance is right in line with the consensus of ten analysts polled by Thomson Financial.
Jeffrey Kang, president and CEO of Comtech Group addressed China’s macroeconomic trends in an earnings press release: “Our business growth reflects observed trends, leaving us to predict sustained growth for the future. China's GDP has maintained a rate of growth above 11% throughout all three quarters this year, and with around half of Chinese consumers intending to increase spending in the next year, along with two thirds planning to increase spending on the consumer electronics sector specifically, we anticipate such consumer spending will further support our strong business growth in the remaining 2007 and 2008.”
Shares of Comtech (COGO) slipped $2.36, or $11.32, to $18.48 at 2:29 p.m. Shares of Comtech have been trading in the range of $13.60 to $22.50 for the past 52 weeks.
