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Pansoft achieves 28% growth in yearly profits, sales surpass previous guidance

|Includes: Pansoft Company Limited (PSOF)

Pansoft Company (NASDAQ: PSOF), an enterprise software maker and service provider for the oil and gas industry in China, has recorded profits of $3.2 million for fiscal 2010 - an increase of 28% on the prior year, driven by strong demand for large-scale software system integration projects.

Earnings per share totalled $0.59 on a diluted basis, compared to $0.47 in 2009.

Revenues also improved and surpassed the company`s previous guidance, hitting $12.1 million, an increase of 42.6% from last year mainly due to higher sales from large-scale software projects, which comprised a larger proportion of total revenue.

"We were successful with our expansion strategy and we acquired several software companies and formed partnerships with complementary businesses to diversify our future revenue streams," said CEO Guoqiang Lin.

As at June 30, 2010, Pansoft had $2.7 million in cash and cash equivalents, compared to $11.3 million a year earlier.

Pansoft expects to achieve organic growth of 60% in revenues in its core business by the end of 2011. It also intends to continue its acquisition strategy and hopes that the businesses it acquired in 2010 will make meaningful contributions to income in 2011.

"We look forward to integrating our acquisitions and benefiting from the synergies from our human capital and sales and marketing efforts. We expect new business generated from our acquisitions to enable us to provide a variety of software solutions and services to a wider range of customer groups and business in China," said chairman of Pansoft`s board Hugh Wang.

Founded in 2001, Pansoft provides enterprise resource planning (ERP) software solutions and on-demand customized services for the oil and gas industry in China. The software helps with accounting, order processing, shipping, invoicing, inventory control and customer relationship management.

It has developed specific ERP software systems for Sinopec and PetroChina and their subsidiaries.

The company was up more than 4% on the back of the news, reaching $5.03 as of 1:38pm ET on the Nasdaq on Tuesday.

Disclosure: no position