Microsemi Corporation (MSCC) has reported a 17.72 percent fall in profit for the quarter ended Jan. 01, 2017. The company has earned $19.50 million, or $0.17 a share in the quarter, compared with $23.70 million, or $0.25 a share for the same period last year. On the other hand, adjusted net income for the quarter stood at $99.80 million, or $0.86 a share compared with $69.30 million or $0.72 a share, a year ago.
Revenue during the quarter surged 32.29 percent to $435.50 million from $329.20 million in the previous year period. Gross margin for the quarter expanded 641 basis points over the previous year period to 63.49 percent. Total expenses were 87.19 percent of quarterly revenues, down from 88.88 percent for the same period last year. This has led to an improvement of 169 basis points in operating margin to 12.81 percent.
Operating income for the quarter was $55.80 million, compared with $36.60 million in the previous year period.
However, the adjusted operating income for the quarter stood at $132.70 million compared to $83.80 million in the prior year period. At the same time, adjusted operating margin improved 502 basis points in the quarter to 30.47 percent from 25.46 percent in the last year period.
"During our first fiscal quarter of 2017, we continued to execute on our winning strategy," stated James J. Peterson, Microsemi's chairman and chief executive officer. "Gross margins improved 90 basis points sequentially, benefiting from strong results in our data center and optical end markets as well as the realization of expected integration synergies. These efforts will enable us to outgrow the industry and outperform our peers to the benefit of our shareholders."
For the second-quarter 2017, Microsemi Corporation forecasts revenue to be in the range of $430 million to $450 million. On an adjusted basis, the company expects diluted earnings per share to be in the range of $0.86 to $0.96.
Working capital declines
Microsemi Corporation has witnessed a decline in the working capital over the last year. It stood at $421.50 million as at Jan. 01, 2017, down 9.57 percent or $44.60 million from $466.10 million on Jan. 03, 2016. Current ratio was at 2.54 as on Jan. 01, 2017, down from 3.29 on Jan. 03, 2016.
Cash conversion cycle (CCC) has decreased to 51 days for the quarter from 154 days for the last year period. Days sales outstanding went down to 43 days for the quarter compared with 54 days for the same period last year.
Days inventory outstanding has decreased to 60 days for the quarter compared with 159 days for the previous year period. At the same time, days payable outstanding went down to 52 days for the quarter from 59 for the same period last year.
Debt increases substantially
Microsemi Corporation has witnessed an increase in total debt over the last one year. It stood at $2,106.20 million as on Jan. 01, 2017, up 116.96 percent or $1,135.40 million from $970.80 million on Jan. 03, 2016. Total debt was 48.42 percent of total assets as on Jan. 01, 2017, compared with 39.64 percent on Jan. 03, 2016. Debt to equity ratio was at 1.19 as on Jan. 01, 2017, up from 0.80 as on Jan. 03, 2016.
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