ARRIS International plc (ARRS) has reported 83.43 percent jump in profit for the quarter ended Sep. 30, 2016. The company has earned $48.16 million, or $0.25 a share in the quarter, compared with $26.26 million, or $0.18 a share for the same period last year.
Revenue during the quarter surged 41.24 percent to $1,725.14 million from $1,221.42 million in the previous year period. Gross margin for the quarter contracted 375 basis points over the previous year period to 25.67 percent. Total expenses were 94.71 percent of quarterly revenues, down from 95.02 percent for the same period last year. This has led to an improvement of 32 basis points in operating margin to 5.29 percent.
Operating income for the quarter was $91.31 million, compared with $60.78 million in the previous year period.
"We had a strong third quarter with revenue solidly in line with our guidance. Cash generation was very robust, with our combined success in the market and the integration of Pace and planned synergies ahead of schedule. I am very proud of what the ARRIS team has accomplished so far in 2016, and excited to lead the organization going forward," said Bruce McClelland, newly appointed ARRIS chief executive officer. "The industry shift to enable the delivery of video content over robust high performance broadband networks continues to accelerate and is at the heart of our strategy. I am very confident we have the talent and product pipeline to capitalize on this global opportunity."
For the fourth-quarter, ARRIS International forecasts revenue to be in the range of $1,665 million to $1,715 million. The company forecasts adjusted revenue to be in the range of $1,675 million to $1,725 million. The company expects diluted earnings per share to be in the range of $0.23 to $0.27. On an adjusted basis, the company expects diluted earnings per share to be in the range of $0.68 to $0.72.
Operating cash flow improves significantly
ARRIS International plc has generated cash of $335.15 million from operating activities during the nine month period, up 54.81 percent or $118.67 million, when compared with the last year period.
The company has spent $455.05 million cash to meet investing activities during the nine month period as against cash outgo of $123.20 million in the last year period. It has incurred net capital expenditure of $37.34 million on net basis during the nine month period, up 10,329.05 percent or $36.98 million from year ago period.
Cash flow from financing activities was $288.30 million for the nine month period, up 1,920.29 percent or $274.03 million, when compared with the last year period.
Cash and cash equivalents stood at $1,031.98 million as on Sep. 30, 2016, up 53.26 percent or $358.63 million from $673.35 million on Sep. 30, 2015.
Debt increases substantially
ARRIS International plc has witnessed an increase in total debt over the last one year. It stood at $2,283.40 million as on Sep. 30, 2016, up 47.25 percent or $732.73 million from $1,550.68 million on Sep. 30, 2015. Interest coverage ratio improved to 4.54 for the quarter from 4.12 for the same period last year.
