China Security & Surveillance Technology, Inc. (CSR), a provider of digital surveillance technology throughout China, announced second quarter financial results this afternoon. Revenues increased 78% year over year to $92.7 million vs. analysts’ consensus estimate of $86.3 million. Net income increased 81% to $7.74 million, or 17 cents per share, compared to $4.27 million, or 11 cents for the same period last year. Adjusted net income (non-GAAP), excluding non-cash expenses totaling $9.8 million, was 39 cents per share, or 2 cents higher than analysts’ estimates.
Mr. Guo Shen Tu, Chief Executive Officer of China Security, commented, ”We are excited by the momentum we saw in the second quarter, with revenue and margin growth that exceeded our internal plan. We continue to see strong growth from manufacturing and systems installation and are seeing a strong trajectory from our newly formed distribution segment as well, which generated more than $10 million in revenue. Our corporate and Safe City products and services continue to show strong demand, and we are beginning to realize benefits from our global outreach, in the form of our recently announced $10 million investment from UAE investors, who we view as strategic partners in our efforts to increase our visibility in the Middle East and elsewhere around the world. We anticipate continued growth in our existing markets within China, even after the Olympic Games, and believe that our efforts to learn more about the global markets will pay off in the future.”
The company issued upside financial guidance. Third quarter revenues are expected to be in a range of $110-$115 million. Analysts currently expect revenues of $103 million for the quarter. Adjusted EPS is projected to be between $0.43 and $0.45, while analysts expect $0.43. The company raised its guidance for the full year, and now expects to recognize revenues between $400 -$410 million vs. prior guidance of $380 – $400 million. China Security expects adjusted net income of $1.60 – $1.76 per share for fiscal 2008. Analysts currently expect full year adjusted earnings of $1.66 per share on $392 million in revenues. Shares of CSR closed at $14.12 today and have traded in a 52-week range of $10.54 – $35.35. Shares are trading 6% higher after hours on thin volume.
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