CDC Corporation's (CHINA) preliminary financial results for the first quarter of 2007 show the company expects total revenues for the first quarter of 2007, ended March 31, 2007, to be approximately US$90 million, an increase of approximately 40% from US$64.6 million in the first quarter of 2006.
"Despite seasonal weakness in some of our businesses, we are pleased to report increases of approximately 40% and 64% in consolidated revenues and adjusted net income respectively, over the prior year period," said Peter Yip, CEO of CDC Corporation. "We continue to believe in the long term potential in 3G mobile content and applications markets in North Asia, including China, and we continue to evaluate partnership opportunities for expanding our 3G footprint in North Asia. Our software business continues to show tremendous strength with record revenues for the quarter. This clearly validates our strategy of vertical specialization and global diversification with revenues balanced between North America, EMEA and Asia Pacific."
The company expects adjusted net income to be approximately US$9.7 million, an increase of approximately 64% from US$5.9 million in the first quarter of 2006.
The company says performance in the first quarter was bolstered by record quarterly revenue at CDC Software of approximately US$75 million, which is up approximately 40% over the same period a year ago and includes license revenue of approximately US$14.5 million, which is up approximately 50% over the same period a year ago. The mobile applications in China performed below expectations due to increased government restrictions on the overall industry. The portal business in China was also impacted by seasonal weakness in the first quarter, in part, due to the Chinese New Year holidays.
In February 2007, CDC Corporation increased estimates for total revenues for 2007 to be in the range of US$415 million to US$420 million, which would be an increase of approximately 35% compared to total revenues for 2006. CDC Corporation also increased estimates for adjusted net income for 2007 to be in the range of US$57 million to US$62 million, which would be an increase of approximately 68% compared to 2006.