Power steering components supplier China Automotive Systems, Inc., reported Tuesday a decrease in first-quarter profit, despite a 7.8% growth in sales, hurt chiefly by one-time charges. On a pro forma basis, quarterly earnings were down from the previous year.

For the first quarter, net income attributable to common shareholders dipped to US$2.3 million or US$0.08 per share from US$4.4 million or US$0.18 per share in the previous year. On a pro forma basis, net income was US$4.226 million, down from US$4.66 million in the previous year. On a 23.2% greater number of shares outstanding, pro forma earnings per share declined to US$0.13 from US$0.18 last year.

The results of the latest quarter included a one-time loss of US$1.56 million related to change in fair value of derivative. Amortization related to convertible note discount was US$122 thousands, compared to US$99 thousands in the past year. Interest expenses of convertible note were US$284 thousands compared to US$131 thousands in the year-ago period.

Total net sales for the quarter grew 7.8% to US$44.7 million from US$41.5 million in the same period last year.

Net sales from steering products for passenger and light-duty vehicles went up 10.9% to US$29.3 million from US$26.4 million, while for commercial vehicles declined 13.4% to US$9.8 million from US$11.3 million. Net sales from oil pumps and sensors rose 45.6% to US$5.4 million from US$3.7 million in the prior-year period.

Qizhou Wu, chief executive of the Company, said, "Demand began to pick up for vehicles during the 2009 first quarter, and especially for smaller passenger vehicles affected by the reduction in sales tax and the Chinese Government's vehicle subsidy for the rural markets."

Hanlin Chen, chairman of China Automotive noted that large-scale government stimulus efforts augmented infrastructure construction, which resulted in recovery of the commercial vehicle segment in late March.

The company expects revenue growth to range from 10% to 15% in fiscal 2009.