New earnings releases on Friday, August 20, 2010 include several companies that could give some insight into the shape of the economy. Food and consumer staples might not see the impact of a turn around in the same way a technology company would. A high-end retailer might, on the other hand, feel the grip of a recession. That goes for companies specializing in luxury items for home décor. All released earnings on Friday.
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Camelot Information Systems Inc. (NYSE:CIS) is a holding company for subsidiaries located in China. It specializes in information technology services and a SAP provider in China, Taiwan and Japan. It had its IPO on July 21, and has since climbed 24% from $10.65 IPO close to August 20 close of $13.19. Camelot came out with earnings for its fiscal second quarter ending June 30, 2010. Earnings per share were up 2 cents a share to $3.4 million in the three months. Net income for the same time period last year was $2.4 million, or 2 cents a share.
The company is based in China but the earnings per American Depositary share came to 18 cents per share, the same quarter last year saw earnings per ADR of 10 cents a share. The company seems to have the ability to generate sales. Revenue was $44.1 million, up from the previous $23.1 million. This was attributed to the financial services information technology sales and its enterprise application services sales. Another company to watch in China's technology sector is Qiao Xing Mobile Communication Co., Ltd. (NYSE:QXM) a smaller communications company at $133 million market cap, up over 5% in early trading on Monday, August 23, 2010.
Hibbett Sports (Nasdaq:HIBB) also released financials to end the week, posting higher profit and sales compared to last year. In the three months ending July 31, 2010 Hibbett posted net income of $4.0 million, or 14 cents per share. A year earlier in the same period, it posted $1.1 million, or 4 cents per share. Revenue increased 14% to $140 million from $123 million a year earlier. Sporting goods might not be recession-proof, but consumers are buying, and the company moves in line with the overall market (beta of 1.2).
As employees attempt to pad their resume, school and certificate institutes could see sale increase. Back to school is around the corner but that will be affecting the next quarter earnings, Corinthian Colleges (Nasdaq:COCO) has just released earnings for the three months and full-year ending June 30, 2010. Diluted earnings per share increased 36%, from 28 cents to 38 cents. This can partially be attributed to student population growth, up 28% to 110,580 compared to 86,088 in the same period one year earlier. New students are up 18% from 29,000 to 34,500. Watch out - new regulations are being looked at to make it harder for students to get loans. If defaults don't come down, the stock certainly will. The tough employment market is pushing individuals to go back to school or start college, increasing revenues for higher education colleges. (Beta says something about price risk, but how much does it say about fundamental risk factors? Check out Beta: Know The Risk.)
The Bottom Line
As we weather the economic storm, it seems companies have started earning a profit, cut costs and releasing some positive financials. Corinthian Colleges is one of the largest education companies in North America, focusing on post-secondary. But there could be others reaping the benefits of a challenging labor market. Sporting goods and international IT companies will see more volatility, but will jump more in better times.
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