Concho Resources, Inc. (CXO) swung to a net loss for the quarter ended Sep. 30, 2016. The company has made a net loss of $51.15 million, or $ 0.38 a share in the quarter, against a net profit of $179.66 million, or $1.49 a share in the last year period. On the other hand, adjusted net income for the quarter stood at $43.43 million, or $0.32 a share compared with $39.28 million or $0.33 a share, a year ago.
Revenue during the quarter dropped 7.10 percent to $430.55 million from $463.47 million in the previous year period. Gross margin for the quarter expanded 575 basis points over the previous year period to 75.94 percent. Total expenses were 99.40 percent of quarterly revenues, up from 29.93 percent for the same period last year. That has resulted in a contraction of 6947 basis points in operating margin to 0.60 percent.
Operating income for the quarter was $2.58 million, compared with $324.76 million in the previous year period.
Tim Leach, Chairman, Chief Executive Officer and President, commented, "Results for this quarter highlight the strength of our business and relentless focus on enhancing capital efficiency. We have continued to accelerate value for shareholders by driving down cash costs while simultaneously exceeding the high-end of our production guidance range through outstanding operational performance. As a result of drilling efficiencies, completion optimization and portfolio high grading, we are raising our 2016 production growth target to 5%. We also achieved several milestones during the quarter, including consolidating core acreage in the Midland Basin, calling a series of bonds which contributed to reducing absolute debt by more than $1 billion year-over-year and investing within cash flow for the fifth consecutive quarter."
Operating cash flow drops significantly
Concho Resources, Inc. has generated cash of $437.30 million from operating activities during the nine month period, down 42.51 percent or $323.29 million, when compared with the last year period.
The company has spent $201.23 million cash to meet investing activities during the nine month period as against cash outgo of $1,823.83 million in the last year period. It has incurred net capital expenditure of $651.27 million on net basis during the nine month period, down 70.69 percent or $1,571 million from year ago period.
Cash flow from financing activities was $694.31 million for the nine month period, down 34.70 percent or $368.92 million, when compared with the last year period.
Cash and cash equivalents stood at $1,158.94 million as on Sep. 30, 2016, up 5,794,595 percent or $1,158.92 million from $0.02 million on Sep. 30, 2015.
Working capital increases sharply
Concho Resources, Inc. has recorded an increase in the working capital over the last year. It stood at $1,146.16 million as at Sep. 30, 2016, up 2,627.20 percent or $1,104.13 million from $42.03 million on Sep. 30, 2015. Current ratio was at 3 as on Sep. 30, 2016, up from 1.04 on Sep. 30, 2015.
Days sales outstanding went up to 98 days for the quarter compared with 95 days for the same period last year.
At the same time, days payable outstanding went up to 169 days for the quarter from 153 for the same period last year.
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