Power steering components and systems supplier China Automotive Systems on Thursday (6 May, 2010) said revenue grew 88% year on year to a record US$84.2m in the first quarter of 2010.

Operating income rose 124.1% to $15.9m. Gross margin was 26.8% versus 24.4%, operating income rose 124.1% to a quarterly record $16m and net income was up 357.6% to $10.3m.

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All of the revenue increase was due to organic growth, the supplier said in a statement.

Gross profit was $22.5m, up 106.7%, though the company has reclassified warranty expenses from selling expenses to cost of goods sold.

Without this reclassification, gross margin in the first quarter of 2010 would have been 30.2%, compared with 27.3% a year ago and 29.0% in the preceding quarter.

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Selling expenses as a percentage of revenue for the first quarter of 2010 were 2.2% versus 2.4% a year ago.

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CEO Qizhou Wu said: “We are encouraged by our first quarter result and long term growth potential. We continue to focus on expansion [with] existing customers and [securing] new customers.

“As we continue to win contracts from more high-quality OEMs who have proven growth records, we have gradually established a large customer base and ability to optimise production cycles to meet the surging needs of the top sellers. This is the reason why we can consistently outgrow the overall auto market in China,” Wu added.

The company raised revenue guidance to 25% year on year for 2010.