Harman International Industries, Incorporated (HAR) has reported an 11.91 percent fall in profit for the quarter ended Dec. 31, 2016. The company has earned $99.45 million, or $1.39 a share in the quarter, compared with $112.90 million, or $1.55 a share for the same period last year. On the other hand, adjusted net income for the quarter stood at $159.25 million, or $2.22 a share compared with $134.23 million or $1.84 a share, a year ago.
Revenue during the quarter grew 9.89 percent to $1,947.47 million from $1,772.16 million in the previous year period. Gross margin for the quarter expanded 46 basis points over the previous year period to 31.22 percent. Total expenses were 91.06 percent of quarterly revenues, up from 91.02 percent for the same period last year. That has resulted in a contraction of 5 basis points in operating margin to 8.94 percent.
Operating income for the quarter was $174.01 million, compared with $159.15 million in the previous year period.
However, the adjusted operating income for the quarter stood at $227.83 million compared to $186 million in the prior year period. At the same time, adjusted operating margin improved 120 basis points in the quarter to 11.70 percent from 10.50 percent in the last year period.
Dinesh C. Paliwal, the Company's chairman, president and chief executive officer said, "HARMAN delivered solid second quarter results, including double digit revenue, EBITDA and EPS growth led by strong performance in our Lifestyle Audio division. Additionally, we continue to leverage our success in Connected Car and Connected Services to develop broader end-to-end solutions for immersive and personalized experiences."
Working capital increases sharply
Harman International Industries, Incorporated has recorded an increase in the working capital over the last year. It stood at $1,239.95 million as at Dec. 31, 2016, up 41.22 percent or $361.93 million from $878.02 million on Dec. 31, 2015. Current ratio was at 1.62 as on Dec. 31, 2016, up from 1.44 on Dec. 31, 2015.
Cash conversion cycle (CCC) has decreased to 16 days for the quarter from 53 days for the last year period. Days sales outstanding went down to 53 days for the quarter compared with 54 days for the same period last year.
Days inventory outstanding has decreased to 27 days for the quarter compared with 65 days for the previous year period. At the same time, days payable outstanding went down to 64 days for the quarter from 66 for the same period last year.
Debt increases substantially
Harman International Industries, Incorporated has witnessed an increase in total debt over the last one year. It stood at $1,337.98 million as on Dec. 31, 2016, up 27.40 percent or $287.73 million from $1,050.25 million on Dec. 31, 2015. Total debt was 21.13 percent of total assets as on Dec. 31, 2016, compared with 18.04 percent on Dec. 31, 2015. Debt to equity ratio was at 0.52 as on Dec. 31, 2016, up from 0.43 as on Dec. 31, 2015.
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