NEW YORK (TheStreet) -- China TechFaith Wireless (CNTF) plunged 21.72% to $2.14 at 1:43 p.m. on Wednesday after the company, a handset solutions provider, reported fourth-quarter earnings that marked declines.
The company reported gross profit of $4 million, down sequentially from $4.9 million. Gross margin was 12.9%, down sequentially from 16.3% thanks mainly to business mix. Operating expenses increased sequentially to $8.8 million from $4.7, primarily because of the impairment of $3.1 million in long-lived assets and the impairment of $1.2 million in goodwill.
Net loss was $2.1 million, or approximately 4 cents per basic and diluted American Depositary Share, compared to net income of $0.3 million in the third quarter.
Net revenue increased sequentially to $31.2 million from $29.9 million.
TheStreet Ratings team rates CHINA TECHFAITH WIRELESS-ADR as a "hold" with a ratings score of C-. TheStreet Ratings Team has this to say about their recommendation:
"We rate CHINA TECHFAITH WIRELESS-ADR (CNTF) a HOLD. The primary factors that have impacted our rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its solid stock price performance and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including feeble growth in the company's earnings per share, deteriorating net income and disappointing return on equity."