CSRA Inc. (CSRA) has reported a 58.33 percent jump in profit for the quarter ended Sep. 30, 2016. The company has earned $76 million, or $0.46 a share in the quarter, compared with $48 million, or $0.35 a share for the same period last year.
Revenue during the quarter surged 30.34 percent to $1,263 million from $969 million in the previous year period. Gross margin for the quarter expanded 29 basis points over the previous year period to 22.17 percent. Total expenses were 87.81 percent of quarterly revenues, down from 90.61 percent for the same period last year. This has led to an improvement of 280 basis points in operating margin to 12.19 percent.
Operating income for the quarter was $154 million, compared with $91 million in the previous year period.
However, the pro forma adjusted EBITDA for the quarter stood at $229 million compared with $236 million in the prior year period. At the same time, adjusted EBITDA margin contracted 622 basis points in the quarter to 18.13 percent from 24.36 percent in the last year period.
"Our strong second quarter results demonstrate the promise of CSRA, as we pivot towards growth and continue to deliver industry leading profitability," said Larry Prior, CSRA president and chief executive officer. "Our investments in business development and our focus on next-generation solutions are paying off, and we are realizing the benefits of rapid integration. Recent new business wins position us well to return to organic growth in fiscal year 2018, and we continue to see significant opportunities to take market share as we deliver innovative and efficient technology solutions to meet our customers' most pressing needs."
For financial year 2017, CSRA Inc. projects revenue to be in the range of $5,000 million to $5,200 million. It forecasts diluted earnings per share to be in the range of $1.91 to $2.04 on adjusted basis for the same period.
Operating cash flow drops significantly
CSRA Inc. has generated cash of $211 million from operating activities during the first half, down 42.35 percent or $155 million, when compared with the last year period.
The company has spent $91 million cash to meet investing activities during the first six months as against cash outgo of $13 million in the last year period.
The company has spent $182 million cash to carry out financing activities during the first six months as against cash outgo of $348 million in the last year period.
Cash and cash equivalents stood at $68 million as on Sep. 30, 2016, up 580 percent or $58 million from $10 million on Oct. 02, 2015.
Debt increases substantially
CSRA Inc. has witnessed an increase in total debt over the last one year. It stood at $2,789 million as on Sep. 30, 2016, up 1,742.05 percent or $2,637.59 million from $151.41 million on Oct. 02, 2015. Total debt was 58.48 percent of total assets as on Sep. 30, 2016, compared with 7.91 percent on Oct. 02, 2015. Debt to equity ratio was at 13.67 as on Sep. 30, 2016, up from 0.17 as on Oct. 02, 2015.
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