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Hollysys 4Q in line; CEO condemns short selling

Mon, 08/15/2011 - 6:13pm
The Associated Press

China's Hollysys Automation Technologies Ltd. said Monday that its fourth-quarter net income grew 12 percent as its revenue grew strongly on demand for its industrial, rail and subway automation systems.

In an unusual message accompanying the release, CEO Changli Wang urged shareholders to tell their brokers not to lend shares to third parties in a tactic meant to deter short selling. Short interest in the shares is at a "historical high," Wang said.

Shares have plummeted 40 percent since a deadly high-speed train collision on July 23 that was apparently caused by lightning. Hollysys provided signaling systems for the trains. It has said that signaling devices on both trains functioned normally and were free of malfunctions before the crash. But China's railway minister has announced a moratorium on new rail projects and promised a nationwide safety inspection.

Net income in the three months through June 30 came to $6.9 million, or 12 cents per share, from $6.1 million, or 11 cents per share a year ago.

Excluding stock-based compensation expenses, adjusted earnings came to 13 cents per share, matching the expectations of analysts polled by FactSet

Revenue rose 27 percent to $71.9 million from $56.4 million, exceeding the $62.2 million expected by analysts.

For the full year, net income rose 61 percent to $41.5 million, or 75 cents per share, from $25.7 million, or 50 cents per share. Revenue rose 51 percent to $262.8 million from $174 million.

The company said it forecasts adjusted earnings in the current fiscal year to be $57 million to $58 million with earnings per American Depositary Share at or above $1. It expects revenue of $354 million to $356 million.

The forecast was above analysts' forecasts for 95 cents per share of earnings on $312.9 million in revenue.

Shares rose 18 cents, or 2.8 percent, to $6.56 in after-hours trading Monday after closing down 3 cents at $6.38 in the regular session.

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