iSoftStone Information Technology: Revenue growth continued, but inventory costs and financing pressures drove a YTD loss.

What happened

iSoftStone's third-quarter revenue rose 12.06% from a year earlier, but profit fell 37.99%. Year-to-date revenue grew 15.70%, while the company reported a net loss, inventory impairment, and negative operating cash flow.

Confirmed

Global impact / market context

Revenue is growing, yet profit per sale is shrinking and stocking costs are hurting results. Inventory impairment means recorded losses on unsold goods, and negative operating cash flow means the business used more cash than it generated, adding financing pressure.

Analyst inference

Investors may weigh whether demand genuinely supports growth or whether unsold inventory is building. A net loss combined with negative operating cash flow can increase reliance on borrowed money or outside funding, making cash available a key constraint on future capital spending.

Analyst inference

What to watch

1. The reported net loss, inventory impairment, and negative operating cash flow indicate stocking and financing pressures that could persist into the next reporting period. Confirmed
2. Watch whether management slows inventory purchases or changes financing plans, since either could ease cash pressure but might also reduce future revenue growth. Proposed
3. Track the gap between revenue growth and profit, because if costs and inventory losses keep rising faster than sales, cash available may tighten further. Analyst inference

Evidence

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