China Nutrifruit's (CNGL) good Q2 results

China Nutrifruits Q2 results were published today.

Second Fiscal Quarter Highlights

Growth in net sales and net income continued during the second fiscal quarter due to strong market demand. Most of the products sold in this quarter were produced after mid-July 2010 when our new production season began. During the second fiscal quarter, we launched new seabuckthorn and blackcurrant glazed fruit and concentrate juice products. We are building a new fruit and vegetable power production line, which is expected to become operational in January 2011.

The following are some of our financial results for the second fiscal quarter of 2011 in comparison to our financial results for the second fiscal quarter of 2010.

Net Sales: Net sales increased $3.2 million, or 20.0%, to $23.2 million for the second fiscal quarter of 2011 from $19.3 million for the same period last year.

Gross Margin: Gross margin was 47.2% for the second fiscal quarter of 2011, as compared to 50.1% for the same period last year.

Net Income: Net income increased $0.8 million, or 13.2%, to $7.2 million for the second fiscal quarter of 2011 from $6.4 million for the same period last year.

Fully diluted earnings per share: Fully diluted earnings per share were $0.18 for the second fiscal quarter of 2011 and 2010.

For the first 6 months EPS was $0.22. Some months ago they affirmed their financial guidance of $90-$95 million in revenue and $22-$23 million in net income for fiscal year 2011. So the coming two quarters they have to announce an EPS of around $0.17 per quarter. Personally I think they are going to beat their guidance.

POSITION: LONG