Aoxing Pharmaceutical Company, Inc. (NYSEMKT:AXN) announced their earnings results for the second quarter. The research pharmaceutical company grew year-over-year earnings 85%to post a solid $6.4 million in revenue. The company also reduced cost of sales by 20% to $1.6 million. This helped the company turn a bottom-line loss from the same period last year into a modest 600k gain. Gross profits for the quarter were $4.8 million which equates to a gross margin rate of 75%. That is an increase of 233% when compared to the second quarter of the previous year.
The company had suffered a $1.9 million net loss during the precious year’s period and the numbers showed a solid turnaround on Aoxing Pharmaceutical Company, Inc. (NYSEMKT:AXN)’s balance sheet. Net cash from operations for the six-month period ended at $3.4 million, compared to only $2.8 million a year ago. Diluted income per share finished at 1 cent also.
For the six-months ended 12/31/14, the company generated revenue of $10.9 million. That is a same-period increase of 56%. The increase is attributed to an increase in sales volume of the company’s Zhongtongan product. It was responsible for 90% of the company’s total revenue. The product is now being sold directly to hospitals. This creates higher sales volume than selling through agents.
The previous period’s slow sales were blamed on a bad harvest that contributed to a dramatic increase in the prices of raw materials used to produce Zhongtongan. This affected the bottom line and led to that period’s 25% margin divergence. The prices have begun to stabilize and return to normal levels allowing for Aoxing Pharmaceutical Company, Inc. (NYSEMKT:AXN) to maximize sales. Gross margins for the same six month period rose 73% due to the wholesale markets price stabilization.
The stock exploded on the earnings news and in the process fixed some technical issues with the chart. The short MA is now running above the long MA which is bullish. The stock is at its 52-week high and needs to find a base.