LJ International Expects Strong 4Q Results

LJ International (JADE) reported 3rd quarter 2006 earnings of $0.12 per share, up 20% yoy. Revenues were $33.23M, 25.2% above yoy. In February JADE raised 4th quarter earnings projections of $0.16 per share on revenue of around $40 million, up from prior view of $0.04-$0.11 per share on $33-27 million in sales. They also boosted full year earnings projections to $0.34 per share on $123 million in revenue, up from their prior forecast of $0.20-$0.28 on sales of $115-$120 million.

JADE currently trades at 37.24 times earnings, and an average long term growth rate of 36.0% and 56.0% short term growth rate. Actual P/E for Trailing Four Quarters is 43.5, and Forward Four Quarters Estimate is 32.4.

Tiffany & Co. (TIF) released earnings results today, announcing a 15% increase to $986.4 million, further supporting the belief that high-end jewelry spending is very strong.

"Sales growth in the quarter ranged across many jewelry categories and price points," said Mark Aaron, vice president of investor relations. "From silver jewelry under $500 to diamond jewelry over $50,000. However, the largest percentage sales growth was at the high end in both the quarter and the year."

As long as equity markets continue to perform well around the world, high-end consumer spending is not dampened by the subprime meltdown or higher gas prices.

LJ International announced in February that they expect a strong 4th Quarter due to a higher ENZO store count, stronger branding, and improved Christmas season sales. Their increased store opening count for 2007 to at least 100 ENZO stores, up from prior guidance of 80 stores are showing to be on track.

Yu Chuan Yih, LJI Chairman and CEO, commented:

ENZO continues to perform well beyond all expectations, not only in store count, but also in overall revenues and now earnings contributions as well. The opening of our latest three stores enables us to start 2007 off to a fast start with prime shopping locations amid a continuing economic boom in China. As we reported last month, ENZO has now reached positive quarterly EBITDA -- earnings before interest, taxes, depreciation and amortization -- and operating profit. This financial performance together with our growing reputation as a jewelry retail trendsetter in China makes us confident that ENZO can achieve our new 100- store target by the end of 2007.

LJ International reports on March 29th.

Disclosure: Author has no position in the above mentioned securities