BEIJING, December 31, 2011 /PRNewswire-Asia-FirstCall/ -- Telestone Technologies Corporation (NASDAQ: TSTC) (the "Company"), a leading supplier of local access network solutions for communications networks in China, today updated its guidance for the business year ending December 31, 2011.
Telestone now expects revenues for the year ending December 31, 2011 to be 15% to 20% lower than in the 2010 fiscal year, or approximately $105.3 to $111.9 million, versus prior guidance of a 30% increase. The Company now expects net income within the range of $16.8 to $22.4 million, reflecting a margin of 16% to 22%, compared with prior guidance of approximately $27.5 million, which was based on 10% net-income growth.
Telestone's updated guidance reflects a change in investment direction among China telecom carriers, who are increasingly focusing their capital spending on next-generation technologies such as 4G wireless, and 2011 represents the last year of 3G deployment. This has delayed the 3G investment designated at the beginning of the year. Although the Company has won an increasing number of bids with the Big-3 carriers, delays in network construction have negatively affected its sales plan for WFDS products. This new guidance is also attributable to uncertainties surrounding auditing issues among the Big-3 carriers, which have complicated the process of doing business and extended payment terms with suppliers. These developments have substantially reduced the Company's visibility during the past few quarters and in the near term. Telestone plans to provide guidance for the 2012 fiscal year when visibility improves.
About Telestone Technologies Corporation
Telestone is a leader and innovator in wireless local-access network technologies and solutions. The company has a global presence, with 30 sales offices throughout China and a network of international branch offices and sales agents. For more than 10 years, Telestone has installed radio-frequency (RF)-based 1G and 2G systems throughout China for its leading telecommunications companies. After intensive research on the needs of carriers in the 3G age, Telestone developed and commercialized its proprietary third-generation local-access network technology, WFDS(TM) (Wireless Fiber-optic Distribution System), which provides a scalable, multi-access local access network solution for China's three cellular protocols. Telestone also offers services including project design, manufacturing, installation, maintenance and after-sales support. The Company has approximately 1,400 employees.
Safe Harbor Statement
This release contains certain "forward-looking statements" relating to the business of Telestone Technologies Corporation and its subsidiary companies. Forward looking statements can be identified by the use of forward-looking terminology such as "believes, expects" or similar expressions. Such forward looking statements involve known and unknown risks and uncertainties, including all business uncertainties relating to new facilities, facility construction, future products, future customers, and other factors that may cause actual results to be materially different from those described herein as anticipated, believed, estimated or expected. Certain of these risks and uncertainties are or will be described in greater detail in our filings with the Securities and Exchange Commission. Telestone Technologies is under no obligation to (and expressly disclaims any such obligation to) update or alter its forward-looking statements whether as a result of new information, future events or otherwise. This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of these securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of such state or jurisdiction.
