FairPoint Communications, Inc. (FRP) has reported a 24.21 percent fall in profit for the quarter ended Sep. 30, 2016. The company has earned $40.21 million, or $1.48 a share in the quarter, compared with $53.05 million, or $1.96 a share for the same period last year.
Revenue during the quarter dropped 6.51 percent to $207.14 million from $221.57 million in the previous year period. Gross margin for the quarter contracted 81 basis points over the previous year period to 53.74 percent. Total expenses were 62.35 percent of quarterly revenues, down from 67.31 percent for the same period last year. This has led to an improvement of 496 basis points in operating margin to 37.65 percent.
Operating income for the quarter was $77.98 million, compared with $72.43 million in the previous year period.
However, the adjusted EBITDA for the quarter stood at $63.89 million compared with $66.69 million in the prior year period. At the same time, adjusted EBITDA margin improved 74 basis points in the quarter to 30.84 percent from 30.10 percent in the last year period.
"We remain focused on improving our customers' experience and our third quarter results show continued progress in our efforts to transform revenue while mitigating losses in legacy products," said Paul H. Sunu, chief executive officer. "Total revenue was up slightly from the second quarter and growth revenue contributed 31.7% of that total. In addition, expenses remained well managed to continue to deliver solid profitability."
Operating cash flow improves significantly
FairPoint Communications, Inc. has generated cash of $96.47 million from operating activities during the nine month period, up 42.94 percent or $28.98 million, when compared with the last year period.
The company has spent $84.43 million cash to meet investing activities during the nine month period as against cash outgo of $82.69 million in the last year period.
The company has spent $5.53 million cash to carry out financing activities during the nine month period as against cash outgo of $5.36 million in the last year period.
Cash and cash equivalents stood at $33.07 million as on Sep. 30, 2016, up 94.16 percent or $16.04 million from $17.03 million on Sep. 30, 2015.
Working capital increases sharply
FairPoint Communications, Inc. has recorded an increase in the working capital over the last year. It stood at $10.98 million as at Sep. 30, 2016, up 33.54 percent or $2.76 million from $8.22 million on Sep. 30, 2015. Current ratio was at 1.10 as on Sep. 30, 2016, up from 1.07 on Sep. 30, 2015.
Days sales outstanding went up to 29 days for the quarter compared with 27 days for the same period last year.
Debt remains almost stable
Total debt of FairPoint Communications, Inc. remained almost stable for the quarter at $907.75 million, when compared with the last year period. Total debt was 72.69 percent of total assets as on Sep. 30, 2016, compared with 66.94 percent on Sep. 30, 2015. Interest coverage ratio improved to 3.77 for the quarter from 3.59 for the same period last year.
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