China Information Technology, Inc. :CNIT-US: Earnings Analysis: For the six months ended December 31, 2016 : May 2, 2017

China Information Technology, Inc. reports financial results for the half-year ended December 31, 2016.

We analyze the earnings along side the following peers of China Information Technology, Inc. – Teradata Corporation (TDC-US) that have also reported for this period.

Highlights

  • Summary numbers: Revenues of USD 7.24 million, Net Earnings of USD -11.11 million.
  • Gross margins narrowed from 38.90% to 22.86% compared to the same period last year, operating (EBITDA) margins now -53.91% from -12.75%.
  • Earnings rose compared to same period last year, despite decline in operating and pretax margins.

The table below shows the preliminary results and recent trends for key metrics such as revenues and net income growth:

2016-12-31 2016-06-30 2015-06-30 2014-12-31 2014-06-30
Relevant Numbers (Semi-Annual)
Revenues 7.24 2.96 16.05 38.18 29.98
Revenue Growth (YOY) -54.91 -92.26 -46.45 -1.75 -19.6
Earnings -11.11 -7.06 -6.76 -29.26 0.03
Earnings Growth (YOY) -64.41 75.86 -22141.48 57.42 100.06
Net Margin -153.46 -238.97 -42.08 -76.64 0.1
EPS -0.28 -0.18 -0.21 -0.91 0
Return on Equity -121.36 -45.41 -35.09 -116.32 0.1
Return on Assets -57.08 -13.45 -7.81 -31.34 0.03

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Market Share Versus Profits

Revenues History
Earnings History

CNIT-US‘s change in revenue this period compared to the same period last year of -54.91% is almost the same as its change in earnings, and is about average among the announced results thus far in its peer group, suggesting that CNIT-US is holding onto its market share. Also, for comparison purposes, revenues changed by 144.85% and earnings by -57.24% compared to the immediate last period.

Revenues Growth Versus Earnings Growth

Quadrant label definitions. Hover to know more

Leader, Earnings Focus, Laggard, Revenues Focus

Earnings Growth Analysis

The company’s year-on-year decline in earnings was influenced by a weakening in gross margins from 38.90% to 22.86%, as well as issues with cost controls. As a result, operating margins (EBITDA margins) went from -12.75% to -53.91% in this time frame. For comparison, gross margins were 31.53% and EBITDA margins were -123.54% in the previous period.

Gross Margin Versus EBITDA Margin

Quadrant label definitions. Hover to know more

Differentiated; Low Cost, Commodity; Low Cost, Commodity; High Cost, Differentiated; High Cost

Margins

Despite a decline in operating (EBIT) margins as well as a decline in pretax margins, the company’s earnings rose.

EBIT Margin Versus PreTax Margin

Quadrant label definitions. Hover to know more

Operation driven Earnings, One-time Favorables, Low Earnings Base, One-time Unfavorables
EBIT Margin History
PreTax Margin History

Access our Ratings and Scores for China Information Technology, Inc.

Company Profile

China Information Technology, Inc. provides integrated cloud-based solutions. Its products and services include elevator security operation monitoring platform and YunMedia. The elevator security operation monitoring platform collects the real-time operational data with elevator data acquisition system and will be transferred to cloud through Internet. The YunMedia is the media terminal customized for elevators with functions such as comprehensive demonstration, body sensor, emergency lighting, rescue alarm, safety publicity, accident comfort and maintenance monitoring. The company was founded on June 18, 2012 and is headquartered in Shenzhen, China.

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