Handset maker Qiao Xing Mobile 2Q profit declines

Mobile handset maker Qiao Xing Mobile Communication Co. Ltd. on Friday reported that operating income plunged 67 percent in its fiscal second quarter, hurt in part by an earthquake in May in the Sichuan province.

Operating income dropped to 76.1 Renminbi ($11.1 million) in the quarter ended June 30, from 230.6 million Renminbi a year earlier.

The Beijing-based company did not provide net income or per-share results.

Revenue fell by more than half, to 383.7 Renminbi ($55.9 million) in the period, from 844.1 million Renminbi a year earlier.

The company said it shipped 566,000 handsets during the period, down 46 percent from 1.1 million units shipped during the second quarter of last year and off 33 percent from 846,000 units shipped during the first quarter of 2008.

Qiao Xing Mobile Communication blamed the drop on the May earthquake in Sichuan province, which slowed down consumption in the Chinese consumer market, and a delayed product release. Average handset prices also came in below year-ago and first-quarter levels, driven down by price erosion among older handset models and sales of more low-end phones.

But the company said the recent launch of its new VEVA handset series should help lift its operating results above year-ago levels in its third and fourth quarters.

Shares of Qiao Xing Mobile Communication Co. Ltd. fell 63 cents, or 14.4 percent, to close at $3.75. In after-hours trading, the stock shed a further 21 cents, or 5.7 percent, to $3.54.