Broadridge Financial Solutions (BR) has reported a 19.15 percent rise in profit for the quarter ended Mar. 31, 2017. The company has earned $75.90 million, or $0.63 a share in the quarter, compared with $63.70 million, or $0.52 a share for the same period last year. On the other hand, adjusted net income for the quarter stood at $83.30 million, or $0.69 a share compared with $70 million or $0.58 a share, a year ago.
Revenue during the quarter surged 46.47 percent to $1,008.90 million from $688.80 million in the previous year period. Gross margin for the quarter contracted 606 basis points over the previous year period to 23.31 percent. Total expenses were 89.13 percent of quarterly revenues, up from 85.39 percent for the same period last year. That has resulted in a contraction of 373 basis points in operating margin to 10.87 percent.
Operating income for the quarter was $109.70 million, compared with $100.60 million in the previous year period.
However, the adjusted operating income for the quarter stood at $133.60 million compared to $109.80 million in the prior year period. At the same time, adjusted operating margin contracted 270 basis points in the quarter to 13.24 percent from 15.94 percent in the last year period.
"After a strong third quarter, Broadridge remains well-positioned to deliver on its full year guidance," said Rich Daly, Broadridge's president and chief executive officer. "We reported very healthy revenue growth, driven by the acquisition of NACC and organic growth of our recurring fee revenues, and double digit Adjusted operating income and Adjusted EPS growth. I am also pleased by the continued record results in Closed sales, which should contribute to Broadridge’s growth over 2018 and beyond."
For fiscal year 2017, Broadridge Financial Solutions projects revenue to grow in the range of 40 percent to 42 percent. The company projects operating income to grow at 13 percent. The company projects adjusted operating income to grow at 15 percent. The company forecasts diluted earnings per share to be in the range of $0.02 to $0.07. The company forecasts diluted earnings per share to be in the range of $0.12 to $0.17 on adjusted basis.
Operating cash flow remains almost stable
Broadridge Financial Solutions has generated cash of $162.10 million from operating activities during the nine month period, up 0.62 percent or $1 million, when compared with the last year period.
The company has spent $613 million cash to meet investing activities during the nine month period as against cash outgo of $78.20 million in the last year period.
The company has spent $4.90 million cash to carry out financing activities during the nine month period as against cash outgo of $38.90 million in the last year period.
Cash and cash equivalents stood at $269.50 million as on Mar. 31, 2017, down 23.96 percent or $84.90 million from $354.40 million on Mar. 31, 2016.
Working capital drops significantly
Broadridge Financial Solutions has witnessed a decline in the working capital over the last year. It stood at $232.30 million as at Mar. 31, 2017, down 45.02 percent or $190.20 million from $422.50 million on Mar. 31, 2016. Current ratio was at 1.26 as on Mar. 31, 2017, down from 1.73 on Mar. 31, 2016.
Days sales outstanding went down to 48 days for the quarter compared with 60 days for the same period last year.
At the same time, days payable outstanding went down to 18 days for the quarter from 22 for the same period last year.
Debt increases substantially
Broadridge Financial Solutions has witnessed an increase in total debt over the last one year. It stood at $1,266.60 million as on Mar. 31, 2017, up 54.56 percent or $447.10 million from $819.50 million on Mar. 31, 2016. Short-term debt stood at $125 million as on Mar. 31, 2017. Total debt was 39.07 percent of total assets as on Mar. 31, 2017, compared with 32.47 percent on Mar. 31, 2016. Debt to equity ratio was at 1.34 as on Mar. 31, 2017, up from 0.91 as on Mar. 31, 2016.
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