Business

CDC Corporation's Overall Revenue Gains, Software Revenue Dips

CDC Corporation (CHINA), a hodgepodge of Internet and software businesses operating in China and and around the world, announced financial results for the third quarter of 2008 and said total revenue from continuing operations was USD103.8 million in the quarter, a modest 5% increase compared to USD98.4 million in the third quarter of 2007.

Total revenue for the company's CDC Software subsidiary was USD89.0 million, dropping slightly from USD89.5 million in the third quarter of 2007. Maintenance revenue was USD26.4 million, up 13% compared to Q3 2007. Total revenue for CDC Games from continuing operations for the third quarter of 2008 was USD12.1 million, an 83% increase compared to USD6.6 million in the same period in 2007. Total revenue for the company's China.com website was a lowly USD2.7 million, an increase of 12% over USD2.4 million in the third quarter of 2007.

The company's CDC Software business unit has recently implemented several initiatives intended to help improve its margins. New customer education classes have been added; a new low-cost packaged solution is being sold to smaller businesses; product extensions such as data archiving, document management, analytics and middleware tools are being offered to enhance customer's current systems; and the coverage and capabilities of CDC Software's support team have been expanded in the areas of products, language, geography and time zones.

Third quarter revenue for CDC Software was geographically distributed with the Americas contributing about 60% of the total, and the rest of world contributing about 40%. The company has not mentioned how the economic crisis could affect those customers' spending habits in the Americas in subsequent quarters.

Gross margin from continuing operations for the company's CDC Games subsidiary during the third quarter of 2008 was 40%. These results were achieved despite the impact of the Olympics, which negatively affected the entire online games industry in China.

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