Inphi Corporation (IPHI) swung to a net loss for the quarter ended Mar. 31, 2017. The company has made a net loss of $11.27 million, or $ 0.27 a share in the quarter, against a net profit of $0.22 million, or $0.01 a share in the last year period. On the other hand, adjusted net income for the quarter stood at $19.55 million, or $0.44 a share compared with $11.29 million or $0.26 a share, a year ago. Revenue during the quarter surged 73.01 percent to $93.58 million from $54.09 million in the previous year period. Gross margin for the quarter contracted 1117 basis points over the previous year period to 57.18 percent. Operating margin for the quarter stood at negative 4.82 percent as compared to a positive 4.14 percent for the previous year period.
Operating loss for the quarter was $4.51 million, compared with an operating income of $2.24 million in the previous year period.
However, the adjusted operating income for the quarter stood at $21.65 million compared to $13.17 million in the prior year period. At the same time, adjusted operating margin contracted 121 basis points in the quarter to 23.13 percent from 24.34 percent in the last year period.
“We are pleased with Q1 results as we continued to grow market share for linear drivers, and ramped ColorZ ahead of plan. For Q2, ColorZ will continue to ramp and we are now engaged in system validation with a second large customer,” said Ford Tamer, president and chief executive officer of Inphi Corporation.
For the second-quarter, Inphi Corp expects revenue to be in the range of $80 million to $88 million. Inphi Corp forecasts net loss to be in the range of $22.80 million to $28.70 million for the second-quarter. Inphi Corp projects adjusted net income to be in the range of $12 million to $17.40 million for the second-quarter. The company projects diluted loss per share to be in the range of $0.54 to $0.68 for the second-quarter. On an adjusted basis, the company projects diluted earnings per share to be in the range of $0.27 to $0.39 for the second-quarter.
Working capital increases sharply
Inphi Corp has recorded an increase in the working capital over the last year. It stood at $439.89 million as at Mar. 31, 2017, up 25.18 percent or $88.49 million from $351.40 million on Mar. 31, 2016. Current ratio was at 8.45 as on Mar. 31, 2017, down from 11.58 on Mar. 31, 2016. Cash conversion cycle (CCC) has decreased to 50 days for the quarter from 95 days for the last year period. Days sales outstanding went down to 40 days for the quarter compared with 54 days for the same period last year.
Days inventory outstanding has decreased to 36 days for the quarter compared with 93 days for the previous year period. At the same time, days payable outstanding went down to 27 days for the quarter from 53 for the same period last year.
Debt increases substantially
Inphi Corp has witnessed an increase in total debt over the last one year. It stood at $402.75 million as on Mar. 31, 2017, up 131.36 percent or $228.67 million from $174.08 million on Mar. 31, 2016. Inphi Corp has witnessed an increase in long-term debt over the last one year. It stood at $402.75 million as on Mar. 31, 2017, up 131.36 percent or $228.67 million from $174.08 million on Mar. 31, 2016. Total debt was 41.09 percent of total assets as on Mar. 31, 2017, compared with 33.98 percent on Mar. 31, 2016. Debt to equity ratio was at 0.88 as on Mar. 31, 2017, up from 0.58 as on Mar. 31, 2016.
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