For the third quarter period ended September 30, 2007, AsiaInfo (ASIA) says total revenue was US$32.4 million, 17% higher than a year ago.

"I am pleased to report another quarter of strong growth in our core telecom software solutions business," said Steve Zhang, AsiaInfo's president and chief executive officer. "We continued to execute against our strategy of delivering innovative, industry leading telecom solutions, with strong gains in the China Mobile market as well as with the other three major carriers. We are also encouraged by the performance of our IT security business, which continues to enjoy a strong recovery."

Gross margin was 50% in the third quarter of 2007 compared to 43% in the year-ago period and 49% in the previous quarter. Gross margin as a percent of net revenue was 55% compared to 51% in the year-ago period and 54% in the previous quarter.

AsiaInfo's telecom business recorded another quarter of steady growth, with net revenue up 19% year-over-year, and 7% sequentially. Net revenue for the Lenovo-AsiaInfo business unit increased 76% year-over-year, and 42% sequentially. Please refer to the end of this press release for condensed segmented financial results for AsiaInfo's two business units.

Total operating expenses for the third quarter of 2007 were US$13.0 million, an increase of 19% year-over-year and a 2% decrease sequentially. Lenovo-AsiaInfo contributed 24% to total operating expenses before corporate general and administrative charges for the third quarter of 2007.

As of September 30, 2007, AsiaInfo had cash and cash equivalents, restricted cash and short term investments totaling US$174.4 million, representing a sequential increase of 6% operating cash flow in the third quarter of 2007 was a net inflow of approximately US$2.4 million.

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