Moody's Corporation (MCO) swung to a net loss for the quarter ended Dec. 31, 2016. The company has made a net loss of $428.60 million, or $ 2.22 a share in the quarter, against a net profit of $217.90 million, or $1.09 a share in the last year period. On the other hand, adjusted net income for the quarter stood at $237.30 million, or $1.23 a share compared with $217.90 million or $1.09 a share, a year ago. Revenue during the quarter grew 8.80 percent to $942.10 million from $865.90 million in the previous year period. Gross margin for the quarter expanded 93 basis points over the previous year period to 71.84 percent. Operating margin for the quarter stood at negative 50.22 percent as compared to a positive 38.47 percent for the previous year period.
Operating loss for the quarter was $473.10 million, compared with an operating income of $333.10 million in the previous year period.
However, the adjusted operating income for the quarter stood at $423.60 million compared to $361.80 million in the prior year period. At the same time, adjusted operating margin improved 318 basis points in the quarter to 44.96 percent from 41.78 percent in the last year period.
"2016 was notable for the variety of events affecting global financial markets," said Raymond McDaniel, president and chief executive officer of Moody’s. "Against volatile market conditions, Moody’s demonstrated solid financial performance, achieving revenue of $3.6 billion, up three percent from 2015. Recognizing ongoing uncertain macroeconomic and geopolitical conditions, for 2017 we are projecting mid-single-digit percent revenue growth and EPS in the range of $5.15 to $5.30, which includes an estimated $0.15 benefit from an accounting change related to equity compensation."
For financial year 2017, Moody's Corporation forecasts operating income to grow at 43 percent. The company forecasts adjusted operating income to grow at 46 percent. It company expects diluted earnings per share to be in the range of $5.15 to $5.30.
Operating cash flow improves
Moody's Corporation has generated cash of $1,226.10 million from operating activities during the year, up 6.28 percent or $72.50 million, when compared with the last year. Cash flow from investing activities was $102 million from investing activities during the year as against cash outgo of $92 million in the last year.
The company has spent $1,009.80 million cash to carry out financing activities during the year as against cash outgo of $461 million in the last year period.
Cash and cash equivalents stood at $2,051.50 million as on Dec. 31, 2016, up 16.73 percent or $294.10 million from $1,757.40 million on Dec. 31, 2015.
Working capital drops significantly
Moody's Corporation has witnessed a decline in the working capital over the last year. It stood at $824.90 million as at Dec. 31, 2016, down 59.26 percent or $1,199.70 million from $2,024.60 million on Dec. 31, 2015. Current ratio was at 1.34 as on Dec. 31, 2016, down from 2.66 on Dec. 31, 2015.
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