Qiao Xing shares plunge after 4Q results

Chinese handset maker Qiao Xing Mobile Communication Co. said Monday its fourth-quarter profit climbed as it shipped more phones, but revenue edged slightly lower as average selling prices declined.

The Beijing-based company's U.S.-traded shares fell $1.13, or 15 percent, to $6.56 in afternoon trading as a result, though an analyst said the quarter was better than expected. The stock has traded between $5.50 and $15.48 andsince going public nearly a year ago.

For the quarter ended Dec. 31, the company earned 142.7 million yuan ($19.6 million), or 2.72 yuan (37 cents) per share, up from 38.2 million yuan, or 2.63 yuan per share, a year earlier. The per-share amounts are not comparable because the company had fewer outstanding shares in the year-ago quarter before it went public.

Revenue slid about 1 percent to 747 million yuan ($102.4 million) from 757.5 million yuan a year earlier.

Cowen and Co. analyst Matthew Hoffman called revenue a "little light," but overall he said the company's earnings per share handily beat expectations.

"The tardiness of the 4Q07 results highlights an ongoing concern, but the company does continue to make overall progress on disclosure," Hoffman wrote.

The company shipped about 862,000 units during the quarter, up 22 percent from a year earlier. Average selling prices fell 19 percent to 861 yuan ($118).

Chief Executive David Li said while competition continues to intensify in the Chinese handset market, the company expects "good results" in 2008. Qiao Xing launched a very low-cost phone, the C3100, in December, and Li said shipments so far have been good. The phone mainly targets rural customers and has a bright flashlight and long standby feature, which the company expects will make it popular in regions with limited or unstable electricity.

For the full year, the company earned 593.5 million yuan ($81.4 million). Earnings per share, excluding items, were 12.28 yuan ($1.68). Revenue rose 24 percent to 3.14 million yuan ($430.6 million).

Hoffman, who rates Qiao Xing "Outperform," expects the Olympics and China's growing middle class to fuel handset sales for the company over the next several quarters _ and years.