Hard to figure

[DOGS THAT BARK]

Wonder what I missed on this one??


Had this earnings report out today on this stock--and stock dropped 35%
Evidently I'm missing something but can't find it.

WUXI, China, March 11 /PRNewswire-Asia-FirstCall/ -- WSP Holdings Limited (NYSE: WH - News; "WSP Holdings" or the "Company"), a leading Chinese manufacturer of API (American Petroleum Institute) and non-API seamless casing, tubing and drill pipes used in oil and natural gas exploration, drilling and extraction ("Oil Country Tubular Goods" or "OCTG"), and other pipes and connectors, today announced its unaudited financial results for the fourth quarter and fiscal year ended December 31, 2008.



Fourth Quarter 2008 Highlights -- Net revenue was $299.3 million, an increase of 130.4% from the fourth quarter of 2007 -- Gross profit was $56.0 million, an increase of 68.5% from the fourth quarter of 2007 -- Gross margin was 18.7%, compared to 25.6% in the fourth quarter of 2007 -- Income from operations was $30.9 million, an increase of 34.7% from the fourth quarter of 2007 -- Net income was $27.8 million, up 65.9% from $16.7 million in the fourth quarter of 2007 -- Basic and diluted earnings per American Depository Share ("ADS," each ADS represents two ordinary shares) were both $0.27 for the fourth quarter of 2008, compared to $0.20 for both in the fourth quarter of 2007 -- Won several supply contracts in February 2009 for a total of 142,777 tonnes of OCTG products to Chinese domestic oil and gas companies

Full Year 2008 Highlights -- Net revenue was $912.1 million, an increase of 88.5% from 2007 -- Gross profit was $208.6 million, an increase of 65.8% from 2007 -- Gross profit margin was 22.9%, compared to 26.0% in 2007 -- Income from operations was $146.6 million, an increase of 41.6% from 2007 -- Net income was $99.3 million, an increase of 33.2% from 2007 -- Basic and diluted earnings per ADS were both $0.97, unchanged from 2007 -- WSP China was granted High and New Technology Enterprise status by the Chinese government, which reduced WSP China's income tax rate from the uniform rate of 25% to a preferential rate of 15%
</PRE>full report
http://biz.yahoo.com/prnews/090311/cnw026.html?.v=44

 

[selkirk]

DTB there is a lot of good news in the earnings release so let us look at a few reasons for a sell off. in a very jittery bearish market...especially for resources.

though they are a supplier, int. drillers and many in North America are off sharply.

there gross margins for q4 to q4 are down from 18.7% to 25.6%
the overall gross margins are weaker and probably (market may believe) get weaker.

Their int. sales have dropped off and is only because of stronger demand from China that there numbers were good. investors may believe two items.

1. int. sales get even weaker.
2. China demand will follow int. markets and get weaker.

ie. prices may drop further

It is difficult to predict how selling prices for our API products in China will change during the remainder of 2009 because of a current oversupply of API products and aggressive price competition in the Chinese market. Based on the purchase contracts we won in February 2009, we estimate that average selling prices to our largest domestic customers will be lower and order volume will remain constant throughout 2009," commented Mr. Piao. "Looking forward, we cannot predict what will happen to raw material prices in 2009, which will have an important impact on our API and non-API sales margins."


also there was operating expenses that increased 143.8% 25.1 million up from 10.3 million in q4.. this was mainly from a Russian bank failing to pay

"provisions for bad debt that resulted from uncollectable letters of credit from a Russian bank which was unable to make payment due to the bank's financial difficulties,"

that will put the fear into many investors....also CNQ cdn. natural resources and Tailsman both announced earnings a few weeks ago..there were very good...but they are cutting back on there exploration budgets...hard not to find most companies cutting back drilling 30-50% sometimes more. anything on the margins is being put off.

thanks
selkirk

 

[DOGS THAT BARK]

DTB there is a lot of good news in the earnings release so let us look at a few reasons for a sell off. in a very jittery bearish market...especially for resources.

though they are a supplier, int. drillers and many in North America are off sharply.

there gross margins for q4 to q4 are down from 18.7% to 25.6%
the overall gross margins are weaker and probably (market may believe) get weaker.

Their int. sales have dropped off and is only because of stronger demand from China that there numbers were good. investors may believe two items.

1. int. sales get even weaker.
2. China demand will follow int. markets and get weaker.

ie. prices may drop further

It is difficult to predict how selling prices for our API products in China will change during the remainder of 2009 because of a current oversupply of API products and aggressive price competition in the Chinese market. Based on the purchase contracts we won in February 2009, we estimate that average selling prices to our largest domestic customers will be lower and order volume will remain constant throughout 2009," commented Mr. Piao. "Looking forward, we cannot predict what will happen to raw material prices in 2009, which will have an important impact on our API and non-API sales margins."


also there was operating expenses that increased 143.8% 25.1 million up from 10.3 million in q4.. this was mainly from a Russian bank failing to pay

"provisions for bad debt that resulted from uncollectable letters of credit from a Russian bank which was unable to make payment due to the bank's financial difficulties,"

that will put the fear into many investors....also CNQ cdn. natural resources and Tailsman both announced earnings a few weeks ago..there were very good...but they are cutting back on there exploration budgets...hard not to find most companies cutting back drilling 30-50% sometimes more. anything on the margins is being put off.

thanks
selkirk

Thanks Kirk You see a lot more than I did and appreciate your pointing them out--I thought it might have been the Russian ordeal--but missed most of the rest.

I always more curious on negative comments on stocks I own than positive--to point out things I miss/overlook. Hadn't seen much on this one untill your disecting issues-good job and
thanks

 

[DOGS THAT BARK]

--getting harder to figure--today same stock is leading gainer--after declaring dividend --

The board also confirmed and approved the Company's dividend policy to declare annual dividend in the range of 30% to 50% of its annual profit going forward. The amounts of the ordinary cash dividend and the special cash dividend declared are consistent with WSP's dividend policy.

:shrug:

WSP Holdings Ltd. ADS topped the list of Biggest Percentage Price Gainers among common stocks on the New York Stock Exchange at the close on Monday.