Accounting-Challenged China Housing and Land Development (CHLN) Plunges

Jacob Harper |

Xi'an, China’s largest real estate developer China Housing and Land Development (CHLN) saw its shares lose nearly a third of their value after the company issued an incredibly disappointing third quarter earnings report.

China Housing's History with the SEC

Revenue was less than half of the previous quarter, though any report from China Housing and Land Development should be taken with a grain of salt. In October the SEC noticed major accounting errors in the company’s financial statements, which resulted in EPS for fiscal year 2010 being “reduced significantly.”

Of course, companies that misstate earnings on purpose tend to do so to make themselves appear increasingly profitable, which is not what happened with China Housing. Reported revenues fell off sharply, and were less than half of the $57.8 million reported in the second quarter of 2013. Earnings as well declined sharply, with the company posting a net loss for the quarter and guidance put expected revenue for the fourth quarter at just between $18 and $22 million.

2013 Q3 China Housing Earnings Details

For their third quarter earnings report, China Housing reported a net loss of $0.8 million, or $0.02 per share, versus the net income of $1.6 million, or $0.04 per share, from the same period a year ago. Revenue for the quarter was $24.8 million, as compared to $28.7 million from the same quarter the previous year. Analysts did not weigh in on China Housing.

The company’s stock plummeted on the poor earnings, shedding 30.64 percent midday to hit $2.06 a share.

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Companies

Symbol Name Price Change % Volume
CHLN China Housing & Land Development Inc n/a n/a n/a 0
BBKQY Bank of Baroda (India) ADR n/a n/a n/a 0

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