P: We beat our profit forecast for the quarter, so we’ve got to be pleased.
C: I agreed, although there are some areas of concern.
P: Yes, but we always thought it would be a tough quarter. $2 million profit on $59 million of revenue is a good performance.
C: That’s true. We’re all delighted that profits went up. But revenues fell for the second quarter in a row-that is what worries me.
P: But we always predicted that, which was why we reduced costs by as much as we did.
C: Yes, I see that operating costs fell from $53 million in Q3 to $46 in Q4.
P: We made the mist of saving by switching to cheaper suppliers.
C: So what accounted for the rest of the costs?
P: One-off charges, either relating to redundancy payments or strategic acquisitions.
C: And what about the profit breakdown by geographic region?
P: Asia made $1.5 million profit: the Americas mad $ 1 million in profit; and we lost $500,000 in Europe.
C: Europe is still dragging us back then.
P: Yes, but we still improved on a loss of $ 700,000 in Q3.
C: And what about our European revenues?
P: They remained flat.
C: Well if we can keep costs low we might manage to break even in Europe in the next quarter.
P: Probably. We expect to see profitability in Europe in the next three to six months.
C: Is there any more scope for cost-cutting next years?
P: We expect to make some saving on shipping cost, but nothing major.
C: That’s fair enough, it’s not as if we need to do anything drastic.