j2 Global, Inc. (JCOM) has reported a 13.77 percent fall in profit for the quarter ended Mar. 31, 2017. The company has earned $25.82 million, or $0.52 a share in the quarter, compared with $29.94 million, or $0.61 a share for the same period last year. On the other hand, adjusted net income for the quarter stood at $57.77 million, or $1.19 a share compared with $51.38 million or $1.05 a share, a year ago.
Revenue during the quarter grew 27.02 percent to $254.67 million from $200.50 million in the previous year period. Gross margin for the quarter expanded 108 basis points over the previous year period to 83.98 percent. Total expenses were 81.16 percent of quarterly revenues, up from 73.40 percent for the same period last year. That has resulted in a contraction of 776 basis points in operating margin to 18.84 percent.
Operating income for the quarter was $47.98 million, compared with $53.34 million in the previous year period.
However, the adjusted operating income for the quarter stood at $92.18 million compared to $81.79 million in the prior year period. At the same time, adjusted operating margin contracted 460 basis points in the quarter to 36.20 percent from 40.79 percent in the last year period.
"I’m very pleased to report record quarterly revenues of $255 million for the first quarter of 2017 putting us well on pace to be within our guidance in revenue in 2017," said Hemi Zucker, CEO of j2. "In addition, we are currently ahead of our adjusted non-GAAP diluted EPS estimates for the year. During the remainder of 2017, we will focus on realizing additional synergies from the integration of previously executed acquisitions while pursuing additional strategic acquisitions."
For financial year 2017, J2 GLOBAL expects revenue to be in the range of $1,130 million to $1,170 million. The company projects diluted earnings per share to be in the range of $5.60 to $6 on adjusted basis.
Operating cash flow declines
j2 Global, Inc. has generated cash of $51.19 million from operating activities during the quarter, down 20.66 percent or $ 13.33 million, when compared with the last year period.
The company has spent $13.37 million cash to meet investing activities during the quarter as against cash outgo of $47.80 million in the last year period.
Cash flow from financing activities was $25.53 million for the quarter as against cash outgo of $30.38 million in the last year period.
Cash and cash equivalents stood at $187.41 million as on Mar. 31, 2017, down 22.80 percent or $55.35 million from $242.76 million on Mar. 31, 2016.
Working capital turns negative
Working capital of j2 Global, Inc. has turned negative to $93.40 million on Mar. 31, 2017 from positive $262.90 million on Mar. 31, 2016. Current ratio was at 0.80 as on Mar. 31, 2017, down from 2.57 on Mar. 31, 2016.
Days sales outstanding went up to 51 days for the quarter compared with 48 days for the same period last year.
Debt increases substantially
j2 Global, Inc. has witnessed an increase in total debt over the last one year. It stood at $828.40 million as on Mar. 31, 2017, up 39.29 percent or $233.65 million from $594.74 million on Mar. 31, 2016. Total debt was 39.40 percent of total assets as on Mar. 31, 2017, compared with 33.68 percent on Mar. 31, 2016. Debt to equity ratio was at 0.89 as on Mar. 31, 2017, up from 0.65 as on Mar. 31, 2016.
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