Applied Optoelectronics, Inc. (AAOI) has reported a 556.89 percent jump in profit for the quarter ended Sep. 30, 2016. The company has earned $17.74 million, or $0.97 a share in the quarter, compared with $2.70 million, or $0.16 a share for the same period last year. On an adjusted basis, net profit for the quarter was $6.96 million, when compared with $6.66 million in the last year period.
Revenue during the quarter grew 22.86 percent to $70.14 million from $57.08 million in the previous year period. Gross margin for the quarter expanded 140 basis points over the previous year period to 33.02 percent. Total expenses were 90.36 percent of quarterly revenues, up from 89.28 percent for the same period last year. That has resulted in a contraction of 109 basis points in operating margin to 9.64 percent.
Operating income for the quarter was $6.76 million, compared with $6.12 million in the previous year period.
However, the adjusted operating income for the quarter stood at $8.06 million compared to $6.92 million in the prior year period. At the same time, adjusted operating margin contracted 65 basis points in the quarter to 11.48 percent from 12.13 percent in the last year period.
"We delivered a strong third quarter with record revenue and achieved top and bottom-line results well above our guidance. Our results were driven by accelerated demand for our market-leading datacenter products, where we generated our sixth consecutive quarter of record revenue, and strong execution by the AOI team," said Dr. Thompson Lin, Applied Optoelectronics, Inc. founder, president and chief executive officer. "With our expansion facility fully operational in Sugar Land we were able to scale to demand and I am very proud of our team’s ability to execute in this increasing-demand environment. We remain focused on building on our momentum to drive growth and achieve our long-term financial objectives."
For the fourth-quarter, Applied Optoelectronics, Inc. projects revenue to be in the range of $75 million to $79 million. It forecasts adjusted net income to be in the range of $8.50 million to $9.50 million. It forecasts diluted earnings per share to be in the range of $0.46 to $0.51 on an adjusted basis for the same period.
Working capital decreases marginally
Applied Optoelectronics, Inc. has witnessed a decline in the working capital over the last year. It stood at $92.11 million as at Sep. 30, 2016, down 2.87 percent or $2.72 million from $94.83 million on Sep. 30, 2015. Current ratio was at 2.28 as on Sep. 30, 2016, down from 2.45 on Sep. 30, 2015.
Cash conversion cycle (CCC) has decreased to 45 days for the quarter from 120 days for the last year period. Days sales outstanding went down to 52 days for the quarter compared with 60 days for the same period last year.
Days inventory outstanding has decreased to 54 days for the quarter compared with 133 days for the previous year period. At the same time, days payable outstanding went down to 61 days for the quarter from 72 for the same period last year.
Debt increases substantially
Applied Optoelectronics, Inc. has witnessed an increase in total debt over the last one year. It stood at $92.29 million as on Sep. 30, 2016, up 87.48 percent or $43.06 million from $49.23 million on Sep. 30, 2015. Total debt was 28.24 percent of total assets as on Sep. 30, 2016, compared with 19.16 percent on Sep. 30, 2015. Debt to equity ratio was at 0.49 as on Sep. 30, 2016, up from 0.30 as on Sep. 30, 2015. Interest coverage ratio deteriorated to 14.63 for the quarter from 17.44 for the same period last year.
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