Baker Tech

Baker Tech: 2Q12 results. Record quarterly earnings of $61.3m, on recognition of $58.2m of deferred profits from sale of PPL Holdings following a favorable outcome of the legal suit btwn PPL, E-Interface and SMM. This compares with a net loss of $0.9m in 2Q11. Revenue rose 30% to $25m on the back of progressive recognition of orders, especially of those secured last yr. This boosted gross revenue by 55% to $7.1m. Mgt notes a slowdown in order enquiries given the backdrop of the Eurozone debt problems and global economy slowdown. But says net order book is at a comfortable level at US$64m at end Jun, up from US$57m a yr ago. These orders are expected to be completed within the next 12-18 mths. Baker Tech project profits are lumpy, and net profit has been further skewed by recent asset sales, hence P/E valuation isn’t meaningful. The stock trades at 0.9x P/B, with cash amounting to ~22.1cts/sh. This could lead to a surprise payout at the end of the fiscal yr.