Concho Resources Inc. (CXO) swung to a net profit for the quarter ended Mar. 31, 2017. The company has made a net profit of $650 million, or $ 4.37 a share in the quarter, against a net loss of $1,020 million, or $7.95 a share in the last year period. On an adjusted basis, net profit for the quarter stood at $72 million, or $0.49 a share compared with a net loss of $6 million, or $0.05 a share in the last year period.
Revenue during the quarter surged 115.49 percent to $612 million from $284 million in the previous year period. Gross margin for the quarter expanded 1818 basis points over the previous year period to 85.78 percent.
Operating income for the quarter was $1,061 million, compared with an operating loss of $1,553 million in the previous year period.
However, the adjusted EBITDA for the quarter stood at $461 million compared with $383 million in the prior year period.
Tim Leach, chairman, chief executive officer and president, commented, "First quarter was an outstanding start to the year in which we anticipate strong growth within cash flow. We delivered exceptional production growth while preserving our low cost structure. As activity rapidly accelerates in the Permian Basin, our execution strength and scale are great advantages that together provide a tight grip on costs and logistics as well as a solid platform for creating long-term shareholder value."
Operating cash flow improves
Concho Resources has generated cash of $407 million from operating activities during the quarter, up 10 percent or $37 million, when compared with the last year period.
Cash flow from investing activities was $330 million for the quarter as against cash outgo of $122 million in the last year period.
The company has spent $19 million cash to carry out financing activities during the quarter as against cash outgo of $10 million in the last year period.
Cash and cash equivalents stood at $771 million as on Mar. 31, 2017, up 65.16 percent or $304.18 million from $466.82 million on Mar. 31, 2016.
Working capital drops significantly
Concho Resources has witnessed a decline in the working capital over the last year. It stood at $573 million as at Mar. 31, 2017, down 26.88 percent or $210.62 million from $783.62 million on Mar. 31, 2016. Current ratio was at 1.73 as on Mar. 31, 2017, down from 2.30 on Mar. 31, 2016.
Days sales outstanding went down to 65 days for the quarter compared with 121 days for the same period last year.
At the same time, days payable outstanding went up to 185 days for the quarter from 162 for the same period last year.
Debt comes down
Concho Resources has recorded a decline in total debt over the last one year. It stood at $2,741 million as on Mar. 31, 2017, down 17.76 percent or $591.85 million from $3,332.85 million on Mar. 31, 2016. Concho Resources has recorded a decline in long-term debt over the last one year. It stood at $2,741 million as on Mar. 31, 2017, down 17.76 percent or $591.85 million from $3,332.85 million on Mar. 31, 2016. Total debt was 20.58 percent of total assets as on Mar. 31, 2017, compared with 29.53 percent on Mar. 31, 2016. Debt to equity ratio was at 0.32 as on Mar. 31, 2017, down from 0.54 as on Mar. 31, 2016.
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