May 11, 2012. /Lesprom Network/. Orient Paper, Inc. announced financial results for the 1Q ended March 31, 2012. 1Q revenue was $34.4 million, an increase of 3.6% from $33.2 million during the same period in 2011, as the company said in a press release received by Lesprom Network. Gross profit remained almost unchanged year over year at $7.8 million. Overall gross margin declined slightly to 22.5% from 23.4% in the same period last year. The decrease of the gross profit margin was mainly due to lower than average gross margin from the Company's new 360,000 tonnes/year production line, which was running at approximately 30% of its designed annual capacity during the quarter. The Company expects the gross profit margin of this new line may continue to be lower than average before the run rate utilization reaches approximately 60% of the design capacity. Operating income decreased slightly to $6.7 million, or 19.5% of the revenue, from $6.8 million, or 20.6% of the revenue, in the 1Q 2011. Net income was $4.7 million, down 3.5% from $4.9 million in the same period last year. Basic and diluted earnings per share for the first quarter of 2012 were $0.25 compared to $0.26 for the same period a year ago. Weighted average shares used in the calculation of diluted earnings per share were 18,447,733 in the first quarter of 2012 compared to 18,346,722 in the 1Q 2011. "1Q of the year is typically a slow quarter due to the extended Chinese New Year holidays in China," stated Zhenyong Liu, Chairman and CEO of Orient Paper. "We are pleased to see our new 360,000 tonnes per year corrugating paper production line steadily ramping up productivity. During the quarter, we dealt with some moderate pricing pressure on our printing paper products and have temporarily discontinued printing paper trading activities. Overall, we anticipate a sizeable revenue growth and profitability driven by our capacity expansion plans and favorable market conditions in fiscal 2012," added Mr. Liu. Orient Paper, Inc., through its wholly owned subsidiary, Shengde Holdings, Inc., controls and operates Baoding Shengde Paper Co., Ltd., and Hebei Baoding Orient Paper Milling Co., Ltd ("HBOP"). Founded in 1996, HBOP is engaged in the production and distribution of products such as corrugating medium paper, offset printing paper, and other paper and packaging-related products in China.