iSoftStone Reports Revenue and Net Income for the Year 2012 [Manufacturing Close - Up]
(Manufacturing Close - Up Via Acquire Media NewsEdge) iSoftStone Holdings Limited, a China-based IT services provider, reported its unaudited financial and operating results for the fourth quarter and year ended December 31, 2012.
T.W. Liu, iSoftStone's Chairman and Chief Executive Officer, said, "I am very delighted with the solid results we achieved during the fourth quarter and full year of 2012. The quarter met our expectation with stabilized margins and improved operating cash flow.
"Overall, 2012 was a solid year. Despite of the challenges for our business and the industry, we managed to respond effectively, by securing major partnerships such as Huawei JV, optimizing business mix, expanding key verticals, improving operational efficiencies, and boosting capabilities in emerging technologies and domain expertise.
"Going forward, although facing challenges of weakening overseas markets, constant cost pressure, and demand shift in emerging technologies, we will continue to execute our strategy, including expanding our business drivers, focusing on cash flow and margin improvement, and investing in technical competencies and domain expertise to support future growth. With the sound foundation strengthened in 2012, we are confident that our growth momentum will continue, and business quality will further improve in 2013."
In a release on March 8, the Company noted that net revenues increased $18.4 million or 21.4 percent to $104.2 million in the fourth quarter 2012 from $85.8 million in the fourth quarter 2011, mainly due to strong demand for IT services from clients in Greater China, partially offset by decreased demand from some global clients, especially clients in Japan and United States.
The Company derives net revenues by providing an integrated suite of IT services and solutions, including (a) IT services, which primarily includes application development and maintenance, or ADM, as well as R&D services and infrastructure and software services, (b) Consulting & Solutions, and (c) Business Process Outsourcing, or BPO, services.
Net revenues from IT services increased $5.2 million or 9.0 percent to $62.8 million in the fourth quarter 2012 from $57.6 million in the fourth quarter 2011. Net revenues from Consulting & Solutions increased $13.0 million or 52.4 percent to $37.9 million in the fourth quarter 2012 from $24.9 million in the fourth quarter 2011.The quarter over quarter growth was mainly contributed by wins of three new public sector consulting and solution projects and an increase in revenues from business intelligence projects for a China domestic bank. iSoftStone expects that these types of consulting and solutions businesses will continue to be one of its growth drivers in the future. Net revenues from BPO services increased 5.8 percent to $3.5 million in the fourth quarter 2012 from $3.4 million in the fourth quarter 2011.
iSoftStone classifies its net revenues by the following geographic markets: Greater China (which includes China, Taiwan, Hong Kong, and Macau) and Global (which includes the United States, Europe, Japan, and others), based on the headquarters locations of its clients.
In the fourth quarter 2012, net revenues in Greater China continued to grow more than the net revenues in the Global market, especially with Japan and United States experiencing weaker macro- economic conditions than in Greater China. The Company's net revenues from Greater China clients increased $20.0 million or 38.2 percent to $72.4 million in the fourth quarter 2012 from $52.4 million in the fourth quarter 2011. Net revenues from U.S. clients decreased $1.1 million or 5.3 percent to $20.0 million in the fourth quarter 2012 from $21.1 million in the fourth quarter 2011 mainly due to reduced demand from one major client in the U.S. market. Net revenues from European clients decreased 1.8 percent to $5.6 million in the fourth quarter 2012 from $5.7 million in the fourth quarter 2011. Net revenues from Japanese clients decreased $1.1 million, year over year, due to reduced demand from Japan clients.
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