China Info Tech Plunges on CFO Resignation

NEW YORK ( TheStreet) -- Shares of China Information Technology ( CNIT) plummeted on Friday after the company announced the abrupt resignation of Chief Financial Officer Jackie You Kazmerzak.

Kazmerzak is leaving the company on Monday to "pursue another opportunity." China Information said Eva Liu, its financial controller, will manage daily financial operations in the interim as it looks for a replacement for Kazmerzak, who joined the company in August 2009.

The stock was the biggest percentage decliner on the Nasdaq, dropping 62 cents, or 24.3%, to $1.93. Volume of 3.2 million is more than five times the issue's trailing three-month daily average of roughly 665,000. The volatile shares have ranged between a low of $1.77 and a high of $2.35 during Friday's session.

Year-to-date, the stock is down more than 50%, and at current levels, it's fallen 71.5% since hitting a 52-week high of $6.78 on Oct. 15.

Friday's market reaction reflects investor nervousness about investing in China following accusations of accounting issues at a number of public companies based in the country in 2011, including China Agritech ( CAGC.PK), China MediaExpress ( CCME.PK), and Longtop Financial ( LFT).

"We will take the time necessary to ensure that we find the best possible candidate to build on Jackie's accomplishments," said Jiang Huai Lin, the company's chairman and CEO. "We remain fully committed to the highest levels of transparency and corporate governance."

On May 10, China Information reported non-GAAP earnings of $7.4 million, or 14 cents a share, for its fiscal first quarter ended March 31, up from a year-ago equivalent profit of $6 million, or 12 cents a share. Revenue rose 6.5% year-over-year to $26.7 million in the quarter from $25.3 million in the same period a year earlier.

The company, which provides information technology services and sells hardware and software products, also reiterated an outlook for an adjusted profit of $42 million to $45 million on revenue of between $165 million and $187 million.

-- Written by Michael Baron in New York.

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Disclosure: TheStreet's editorial policy prohibits staff editors, reporters and analysts from holding positions in any individual stocks.

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