CDC falls to 1Q loss on increased costs CDC swings to 1st-qtr loss as higher revenue costs, operating expenses overshadow sales growth
CDC falls to 1Q loss on increased costs CDC swings to 1st-qtr loss as higher revenue costs, operating expenses overshadow sales growth May 21, 2008: 05:22 PM EST
NEW YORK (Associated Press) - Hong Kong-based software, gaming and Internet service provider CDC Corp. said Wednesday it swung to a first-quarter loss as higher costs outweighed growth in its software unit, but adjusted results topped Wall Street expectations.
CDC reported a first-quarter loss of $11.9 million, or 11 cents per share, compared with a year-ago profit of $64,000, or breakeven on a per-share basis. Excluding charges, CDC broke even for per-share earnings from continuing operations.
The company's revenue rose to $98.3 million from $88 million.
Analysts polled by Thomson Financial expected an adjusted loss of a penny per share on $97.7 million in revenue.
Revenue from CDC Software, including global services revenue, rose 15 percent to $87.3 million, while revenue from CDC Games declined 11 percent to $8.7 million. Cost of revenue rose 26 percent to $55.9 million.
Operating expenses also rose 28 percent to $52.4 million, due mostly to increased sales and marketing expenses and general and administrative expenses.
"Overall, we are in a strong position and seeing positive indicators in our software and games businesses, which are growing and each capable of generating a significant portion of their revenues from recurring sources, despite the very challenging market conditions," Chief Executive Peter Yip said in a statement.
CDC shares finished regular trading down 7 cents at $3.54.
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