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7 years ago
UPDATE 2-SORL Auto Parts Q1 beats, sees Q2 sales above market
May 14, 2010 / 11:12 AM / 7 years ago

UPDATE 2-SORL Auto Parts Q1 beats, sees Q2 sales above market

3 Min Read

* Q1 EPS $0.17 vs est $0.15

* Q1 revenue up 69 pct

* Sees Q2 rev at about $47 mln, above est

* Says focused on emerging and developed markets

* Shares up 5 pct pre-market (Adds details, updates share movement)

May 14 (Reuters) - Chinese air brake systems maker SORL Auto Parts Inc (SORL.O) posted quarterly results that beat estimates, helped by improving margins and surging demand for trucks in China, and gave a second-quarter sales outlook above expectations, sending its shares up 5 percent before market.

The company forecast second-quarter sales of about $47 million, while analysts were expecting revenue of $43.4 million, according to Thomson Reuters I/B/E/S.

"We are gradually increasing our penetration into international markets. We are focused on emerging markets and also developed markets such as Europe as well," Chief Executive Xiaoping Zhang said in a statement.

Sales from international markets jumped 85 percent to $8.5 million, helped by a recovering global economy and the continued development of China's automotive industry.

For the first quarter, SORL reported net income attributable to stockholders of $3.2 million, or 17 cents a share, compared with $944,911, or 5 cents a share, a year ago.

SORL, which produces, distributes and markets automotive air brake valves and related components to automotive original equipment manufacturers, posted a 69 percent jump in revenue at $34.1 million.

Analysts were expecting the company to earn 15 cents a share, before special items, on revenue of $30.20 million.

Higher transportation needs for supplies and resources due to rapid urban expansion in interior mainland China resulted in an increased demand for trucks.

The rise in gross margin resulted from enhanced production efficiencies, improving production technologies as well as a favorable shift in product mix, the company said.

SORL added that it signed a strategic supply agreement with Shandong KAMA Automobile Manufacturing Co Ltd to provide clutch boosters, clutch master cylinders and other air brake systems-related products.

Shares of the company were up 5 percent at $10.61 before market Friday. They closed at $10.11 Thursday on Nasdaq. (Reporting by Fareha Khan in Bangalore; Editing by Maju Samuel, Unnikrishnan Nair)

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