A lot of people are probably looking at the initial EPS and panicking. They are overlooking the fact that the diluted EPS of .27 is due to a one time write down of $9 million. They won't have that write down going forward. Since Q1 is traditionally their weakest Q, we can expect over $.54 per quarter going forward (probably much more if they hit a good acquisition). I'd be very surprised if this stock does anything less the $2.00 a share GAAP this year. The institutional guys will pick up on this and gladly take shares off the panicky, less savvy retail guys. Unless the broader market suffers a pullback, we should continue our climb over the coming weeks.
Zheng Cheng, CME's Founder and CEO, commented, "We started 2010 on a very strong note with record revenue and net income. Our revenue and net income for the quarter grew by 39% and 27% respectively when compared to the 2009 fourth quarter. Basic and diluted earnings per share in the first quarter of 2010 was $0.28 and $0.27, respectively (after a one-time charge of $9,242,000 related to a deemed dividend on the issuance of our convertible preferred stock in the first quarter); excluding this deemed dividend, the income attributable to holders of common shares (non-GAAP net income) would be $18,142,000 and the basic and diluted earnings per share would have been $0.58 and $0.54, respectively."
