Cogo Reiterates Guidance and Provides Update on Business Performance; Consistent Growth Continues in Second Quarter
biz.yahoo.com
Tuesday June 17, 8:30 am ET
SHENZHEN, China, June 17 /PRNewswire-FirstCall/ -- Cogo Group, Inc. (Nasdaq: COGO), a leading provider of customized design solutions for the technology manufacturing sector in China, today provided an update on its business performance in the second quarter of 2008 along with an outlook for the year.
"We see our business in line with our growth target. During the second quarter of 2008, although Chinese domestic handset demand has been weaker than expected due to the Sichuan earthquake and concerns about inflation, we believe strong business growth from other sectors should be able to offset the weak domestic mobile handset market. We also expect demand to grow during the Olympics in the second half of the year," said Jeffrey Kang, Chairman and CEO.
The Company reiterated 2008 full year guidance on non-GAAP earnings at $0.92 per share and revenue of $290 million, which would represent 30% year- on-year growth. It said it expected second quarter revenue to be around $67- $69 million with non-GAAP at $0.21 per share, both representing approximately 30% year on year growth.
Handset revenues make up less than approximately 35% of total company revenue and nonetheless continue to see strong export growth. The company also makes telecom infrastructure and digital media products, and has recently introduced a line of industrial applications -- which have experienced faster than expected revenue growth in the second fiscal quarter.
"Although we face certain market challenges in the near term, our broad customer base and multi-industry coverage that we've built in over 10 years in business will help us continue to grow sustainable revenues and earnings," said Mr. Kang. "Cogo has gone through several industry and general economic downturns in the past 10 years. I believe our unique business model providing technology platform services is able to perform well and deliver consistent growth even in an economic downturn."
At the end of the first fiscal quarter of 2008, Cogo had over 1000 technology enterprise customers and ARPU (Average Revenue Per User) was over USD$55,000 in the first quarter.
"We plan to aggressively increase our number of customers and ARPU to drive business growth -- including further diversifying our customer base to ensure that no single industry makes up more than 30% of revenues in 2009," said Mr. Kang. "We believe that the Chinese economy and our end markets remain fundamentally strong, setting us up for strong growth in the second half of this year." |
