VanceInfo Technologies Inc. fell the most in eight months after the Chinese information technology company forecast net income for 2012 that missed estimates and said it will merge with HiSoft Technology International Ltd.
VanceInfo, which counts International Business Machines Corp. among its customers, lost 12 percent to $8.77 at 2:52 p.m. in New York, the largest decline since Nov. 21. Trading volume was eight times the stock’s three-month daily average, according to data compiled by Bloomberg.
Beijing-based VanceInfo said it expects to report adjusted earnings per American depositary share between 75 cents and 81 cents, less than a previous forecast as high as 92 cents per share. The average estimate for 2012 net income was 88 cents per share, according to 11 analysts surveyed by Bloomberg.
“Vance has struggled to deliver a consistent margin profile,” said Joseph Foresi, an analyst at Janney Montgomery Scott LLC in Boston. “Revenues were actually revised upward, so the fact that they had to bring down earnings is concerning because maybe it leads to further inconsistency.”
Foresi has a neutral rating on VanceInfo.
VanceInfo and HiSoft, which counts General Electric Co. and Microsoft Corp. as customers, agreed to an all-stock merger in which shareholders would each own approximately 50 percent of the combined company. HiSoft will be the surviving listed stock, and the new company will be headed by HiSoft Chief Executive Officer Tiak Koon Loh, the companies said.