Chinese meat and food processing company Zhongpin, Inc. (HOGS) reported Thursday a year-over-year increase in profit for the fourth quarter, reflecting strong revenue growth and lower impairment losses. Earnings per share for the quarter surged, but missed analysts' expectations by a penny. The company also backed its earnings and revenue forecast for the full-year 2010.
The Changge City, China-based company reported net income of US$11.89 million or US$0.34 per share, higher than US$5.52 million or US$0.18 per share in the prior-year quarter.
On average, three analysts polled by Thomson Reuters expected the company to report earnings of US$0.35 per share for the fourth quarter. Analysts' estimates typically exclude special items.
Excluding foreign currency translation, comprehensive income for the quarter surged to US$11.90 million from US$4.78 million in the year-ago quarter.
Net revenues for the quarter increased to US$215.49 million from US$139.82 million in the same quarter last year, and topped three Wall Street analysts' consensus estimate of US$206.03 million. The growth was primarily due to higher volume for pork and pork products, and higher average market prices for pork and pork products.
Income from operations for the fourth quarter rose to US$13.17 million from US$8.29 million in the prior-year quarter, while total operating expenses were US$11.49 million, up from US$9.39 million in the year-ago quarter.
Gross profit for the quarter was US$24.66 million, up from US$17.68 million in the same quarter last year. Impairment loss for the quarter narrowed to US$56,103 from US$3.18 million in the year-ago quarter. The company also recorded a gain from sale-leaseback of US$0.55 million in the latest quarter.
The company ended the second quarter with cash and cash equivalents of US$68.98 million, compared to US$41.86 million at end of the prior-year quarter.
For fiscal 2009, the company reported net income of US$45.59 million or US$1.46 per share, higher than US$31.38 million or US$0.05 per share in the prior year. Analysts expected the company to report earnings of US$1.48 per share for fiscal 2009.
Excluding foreign currency translation, comprehensive income for the year grew to US$45.43 million from US$42.29 million in the year ago.
Net revenues for the full year surged 34.5% to US$726.04 million from US$539.83 million in the previous year. The Street was looking for full-year 2009 revenues of US$722.57 million.
"In 2010, we will continue to execute our strategic plan to sustain the growth we have achieved in the last five years. In 2010, we expect to develop new markets and expand our distribution channels. Through our aggressive marketing campaigns, we expect to strengthen our brand recognition and customer loyalty. Our objectives are higher sales and improved profitability," chairman and chief executive officer, Xianfu Zhu said.
Looking ahead for fiscal 2010, the company said that it will be maintaining its prior year guidance. Net income is expected in a range of US$52 million to US$57 million or US$1.49 to US$1.64 per share. Analysts currently expect earnings of US$1.70 per share for the full-year 2010.
The company also continues to expect sales revenues for the year between US$900 million and US$940 million. Analysts are presently looking fiscal 2010 revenues of US$949.97 million.
HOGS closed Thursday's regular trading session at US$13.40, down US$0.12 or 0.89% on a volume of 0.57 million shares, higher than the three-month average volume of 0.46 million shares.
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