CSR Earnings Cheat Sheet: Margins Keep Growing, but Profit Drops
China Security & Surveillance Technology, Inc. (NASDAQ:CSR) reported a lower net income in second quarter, missing analysts’ estimates. China Security & Surveillance Technology Inc is in business of installing, manufacturing and distribution of surveillance & safety systems, which integrates development, manufacturing, marketing, & maintenance of digital video surveillance.
China Security & Surveillance Technology Earnings Cheat Sheet for the Second Quarter
Results: Net income for the security and protection services company fell to $6 million (7 cents per share) vs. $17.8 million (23 cents per share) a year earlier. This is a decline of 66.5% from the year earlier quarter.
Revenue: Fell 7.1% to $156.3 million from the year earlier quarter.
Actual vs. Wall St. Expectations: CSR fell short of the mean analyst estimate of 22 cents per share. It fell short of the average revenue estimate of $191 million.
Quoting Management: “We just completed a quarter where the results of important strategic decisions were reflected in a gross margin expansion and a positive cash flow,” said Mr. Guoshen Tu, Chairman and Chief Executive Officer of CSST. “Although our revenues were impacted by the structural change in our customer mix, we continue to see growth opportunities in the surveillance and safety industry in China, with favorable government support, as well as great potential in the security services segment. Large-scale projects and our proven execution and service capabilities continue to strengthen our competitive position in China.”
Last quarter marked the fifth consecutive quarter of gross margins expanding as the company’s gross margin expanded 1.1 percentage points to 26.9% from the year earlier quarter. Over that span, margins have grown on average 4.3 percentage points per quarter on a year-over-year basis.
The company has now seen net income fall in each of the last two quarters. In the first quarter, net income fell 48.8% from the year earlier quarter.
The company has now fallen short of analyst estimates for the last three quarters. It missed the mark by 9 cents in the first quarter and by 9 cents in the fourth quarter of the last fiscal year.
Revenue has fallen in the past two quarters. In the first quarter, revenue declined 17.6% to $99.1 million from the year earlier quarter.
Competitors to Watch: Mace Security Intl., Inc. (MACE), Magal Security Systems Ltd. (NASDAQ:MAGS), Napco Security Systems (NASDAQ:NSSC), Vicon Industries, Inc. (AMEX:VII), Tyco International Ltd. (NYSE:TYC), Checkpoint Systems, Inc. (NYSE:CKP).
(Source: Xignite Financials)