Allegion plc (ALLE) has reported a 4.03 percent rise in profit for the quarter ended Dec. 31, 2016. The company has earned $74.80 million, or $0.77 a share in the quarter, compared with $71.90 million, or $0.74 a share for the same period last year. On the other hand, adjusted net income for the quarter stood at $78.70 million, or $0.81 a share compared with $86.50 million or $0.89 a share, a year ago.
Revenue during the quarter grew 4.46 percent to $569.70 million from $545.40 million in the previous year period. Gross margin for the quarter expanded 142 basis points over the previous year period to 41.79 percent. Total expenses were 82.94 percent of quarterly revenues, down from 85.06 percent for the same period last year. This has led to an improvement of 212 basis points in operating margin to 17.06 percent.
Operating income for the quarter was $97.20 million, compared with $81.50 million in the previous year period.
However, the adjusted operating income for the quarter stood at $102 million compared to $103.50 million in the prior year period. At the same time, adjusted operating margin contracted 107 basis points in the quarter to 17.90 percent from 18.98 percent in the last year period.
"Allegion's fourth-quarter results show continued momentum in driving industry-leading organic revenue growth and operating performance," said David D. Petratis, Allegion chairman, president and chief executive officer. "We are well-positioned going into 2017 to drive strong organic growth, expand operating margins and continue to create value for our shareholders."
For financial year 2017, Allegion plc expects revenue to grow in the range of 5.50 percent to 6.50 percent. The company projects diluted earnings per share to be in the range of $3.55 to $3.70. The company projects diluted earnings per share to be in the range of $3.55 to $3.70 on adjusted basis.
Operating cash flow improves significantly
Allegion plc has generated cash of $377.50 million from operating activities during the year, up 46.89 percent or $120.50 million, when compared with the last year.
The company has spent $64 million cash to meet investing activities during the year as against cash outgo of $533.80 million in the last year.
The company has spent $196 million cash to carry out financing activities during the year as against cash inflow of $195 million in the last year period.
Cash and cash equivalents stood at $312.40 million as on Dec. 31, 2016, up 56.43 percent or $112.70 million from $199.70 million on Dec. 31, 2015.
Working capital increases sharply
Allegion plc has recorded an increase in the working capital over the last year. It stood at $399.70 million as at Dec. 31, 2016, up 38.78 percent or $111.70 million from $288 million on Dec. 31, 2015. Current ratio was at 1.93 as on Dec. 31, 2016, up from 1.64 on Dec. 31, 2015.
Cash conversion cycle (CCC) has decreased to 27 days for the quarter from 30 days for the last year period. Days sales outstanding went down to 21 days for the quarter compared with 26 days for the same period last year.
Days inventory outstanding has increased to 31 days for the quarter compared with 29 days for the previous year period. At the same time, days payable outstanding was almost stable at 25 days for the quarter, when compared with the previous year period.
Debt comes down marginally
Allegion plc has recorded a decline in total debt over the last one year. It stood at $1,463.80 million as on Dec. 31, 2016, down 3.89 percent or $59.30 million from $1,523.10 million on Dec. 31, 2015. Total debt was 65.13 percent of total assets as on Dec. 31, 2016, compared with 66.65 percent on Dec. 31, 2015. Debt to equity ratio was at 12.58 as on Dec. 31, 2016, down from 51.28 as on Dec. 31, 2015. Interest coverage ratio improved to 6.11 for the quarter from 5 for the same period last year.
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