PacificNet's (PACT.PK) poor unaudited results for the third quarter ended September 30, 2006 show the company is still trying to cope with mobile value-added service regulations in China.
PacificNet posted a loss of US$1.1 million, or 10 cents per share, compared with a profit of US$611,000, or 5 cents per share, during the same period last year.
Third quarter revenues were US$12,875,000 representing an increase of 16.5% as compared to US$11,047,000 from Q3 2005. And quarterly gross profit was US$2,483,000, an increase of 13.1% as compared to US$2,195,000 from Q3 2005.
Tony Tong, Chairman and CEO of PacificNet, said, "Q3 2006 marks the beginning of PacificNet's transformation away from the low-margin telecom business into the new high-margin gaming business,"
PacificNet also said it recorded a charge of $800,000 for liquidated damages related to issuing convertible notes.
Cash and cash equivalents were US$7,439,000 as of September 30, 2006, compared to US$9,579,000 at December 31, 2005 as the Company invested its cash to drive revenue and profit growth.
Pacificnet anticipates total revenues for fiscal year 2006 to be in the range of US$60 to US$65 million.