AsiaInfo-Linkage Shares Plunged: What You Need to Know

Before you go, we thought you'd like these...
Before you go close icon

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What:AsiaInfo-Linkage (NAS: ASIA) dropped as much as 25% in intraday trading today after the company issued disappointing guidance for the current quarter.

So what: The company reported second-quarter non-GAAP EPS of $0.40, up 14% year over year and a penny above the $0.39 consensus estimate. A tax rate adjustment contributed $0.25 to GAAP EPS of $0.45. Revenue grew 95% year over year, but operating income grew a mere 2%. Non-GAAP operating margin deteriorated to 26.6% from 29.9% in the year-ago quarter, mainly due to the amortization of intangible assets acquired during a merger.

Now what: The company expects its tax rate to be 15% going forward, down from 25%. That should contribute an additional 13% to earnings, but guidance was disappointing. Management said it expects non-GAAP of $0.34 to $0.37. That's below both the $0.40 figure in the year-earlier quarter and $0.41 consensus estimate.

Interested in more info on AsiaInfo? Add it to your watchlist byclicking here.

At the time this article was published Fool contributor Cindy Johnson does not own shares of any company named above. We Fools may not all hold the same opinions, but we all believe thatconsidering a diverse range of insightsmakes us better investors. The Motley Fool has adisclosure policy.

Copyright © 1995 - 2011 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

Read Full Story

Want more news like this?

Sign up for Finance Report by AOL and get everything from business news to personal finance tips delivered directly to your inbox daily!

Subscribe to our other newsletters

Emails may offer personalized content or ads. Learn more. You may unsubscribe any time.

From Our Partners