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CA Inc. (CA) has reported a 9.77 percent fall in profit for the quarter ended Mar. 31, 2017. The company has earned $157 million, or $0.38 a share in the quarter, compared with $174 million, or $0.42 a share for the same period last year. On the other hand, adjusted net income for the quarter stood at $227 million, or $0.54 a share compared with $252 million or $0.60 a share, a year ago. Revenue during the quarter went up marginally by 0.30 percent to $1,012 million from $1,009 million in the previous year period. Gross margin for the quarter expanded 14 basis points over the previous year period to 85.28 percent. Total expenses were 78.75 percent of quarterly revenues, up from 72.35 percent for the same period last year. That has resulted in a contraction of 641 basis points in operating margin to 21.25 percent.
Operating income for the quarter was $215 million, compared with $279 million in the previous year period.
However, the adjusted operating income for the quarter stood at $319 million compared to $379 million in the prior year period. At the same time, adjusted operating margin contracted 604 basis points in the quarter to 31.52 percent from 37.56 percent in the last year period.
Mike Gregoire, CA Technologies chief executive officer, said "CA delivered strong performance both for the full year and the fourth quarter of fiscal 2017. We ended the year with momentum, and our fourth quarter performance enabled us to deliver most metrics at or above the high-end of our full year guidance ranges."
For financial year 2018, CA Inc. forecasts revenue to be in the range of $4,120 million to $4,170 million. It forecasts operating income to grow in the range of 26 percent to 27 percent. It forecasts adjusted operating income to grow at 36 percent. It expects diluted earnings per share to be in the range of $1.67 to $1.72. It expects diluted earnings per share to be in the range of $2.35 to $2.40 on adjusted basis for the same period.
Working capital increases
CA Inc. has recorded an increase in the working capital over the last year. It stood at $727 million as at Mar. 31, 2017, up 9 percent or $60 million from $667 million on Mar. 31, 2016. Current ratio was at 1.24 as on Mar. 31, 2017, up from 1.23 on Mar. 31, 2016.
Days sales outstanding went up to 34 days for the quarter compared with 28 days for the same period last year.
Debt increases substantially
CA Inc. has witnessed an increase in total debt over the last one year. It stood at $2,791 million as on Mar. 31, 2017, up 42.91 percent or $838 million from $1,953 million on Mar. 31, 2016. Total debt was 22.13 percent of total assets as on Mar. 31, 2017, compared with 17.43 percent on Mar. 31, 2016. Debt to equity ratio was at 0.49 as on Mar. 31, 2017, up from 0.36 as on Mar. 31, 2016.
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