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Ninetowns Digital (ticker: NINE), a Chinese software company, beat Q4 2004 earnings estimates by $0.01. Details:


Q4 Results
(all percentage changes and comparisons are sequential, unless stated otherwise)

  • Net revenues increased 18.8% to $7.5 million.
  • Enterprise software sales increased 7.2% to $6.6 million.
  • Gross profit margin decreased from 98.1% to 96.2%. The Q-O-Q decrease was primarily due to the expected higher revenue contribution from the lower margin software development business.
  • Operating income increased 14.1% to $5.0 million.
  • Net income increased 21.2% to $5.2 million.
  • Diluted EPS was $0.16 vs consensus estimate of $0.15.

FY 2005 Guidance:

  • Net revenue of $31.4 - $36.2 million, representing Y-O-Y growth of 39.0%.
  • Operating margin of 65% - 70%.
  • Diluted EPS of $0.60 - $0.70. Consensus estimate is $0.64.

Q1 2005 Guidance:

  • Net revenue of $7.1 - $7.9 million, representing Y-O-Y growth of 53.9%.
  • Q1 is traditionally a slower quarter for enterprise software sales in China due to decreased business activities throughout China before, during and after the week-long Chinese New Year holidays.  In addition, net revenues from software development services are typically higher in Q3 and Q4 of each year because NINE's software development contracts are historically signed during that time.
  • Operating margin of 65% - 70%.
  • Diluted EPS of $0.15 - $0.17. Consensus estimate is $0.16.

NINE chart below.
Nine

Source: Ninetowns Digital (NINE) beats estimates, stock up in pre-market (4Q04 earnings)