Pentair plc (PNR) swung to a net profit for the quarter ended Dec. 31, 2016. The company has made a net profit of $131 million, or $ 0.71 a share in the quarter, against a net loss of $453.30 million, or $2.52 a share in the last year period. On the other hand, adjusted net income for the quarter stood at $143.80 million, or $0.78 a share compared with $160.40 million or $0.88 a share, a year ago.

Revenue during the quarter dropped 7.83 percent to $1,188.10 million from $1,289 million in the previous year period. Gross margin for the quarter expanded 349 basis points over the previous year period to 37.04 percent. Total expenses were 86.38 percent of quarterly revenues, down from 86.68 percent for the same period last year. This has led to an improvement of 30 basis points in operating margin to 13.62 percent.

Operating income for the quarter was $161.80 million, compared with $171.70 million in the previous year period.

"Including the ERICO acquisition we were able to deliver 6 percent sales growth, 11 percent segment income growth, and free cash flow from continuing operations of $609 million, or 109 percent conversion of adjusted net income despite the challenges that we faced from an uncertain global economic environment in 2016," said Randall J. Hogan, Pentair chairman and chief executive officer.
 

For the first-quarter, Pentair expects revenue to be $1,140 million. The company projects diluted earnings per share to be $0.50. On an adjusted basis, the company expects diluted earnings per share to be $0.61. 

For financial year 2017, Pentair expects revenue to be $4,700 million for fiscal year 2017. The company forecasts diluted earnings per share to be in the range of $3.03 to $3.13. The company forecasts diluted earnings per share to be in the range of $3.45 to $3.55 on adjusted basis.

The company has spent $121.80 million cash to meet investing activities during the year as against cash outgo of $1,965.50 million in the last year. It has incurred net capital expenditure of $93.10 million on net basis during the year, up 7.38 percent or $6.40 million from year ago.

The company has spent $600.10 million cash to carry out financing activities during the year as against cash inflow of $1,286.30 million in the last year period.

Cash and cash equivalents stood at $238.50 million as on Dec. 31, 2016, up 88.84 percent or $112.20 million from $126.30 million on Dec. 31, 2015.
 

Working capital declines
Pentair plc has witnessed a decline in the working capital over the last year. It stood at $1,200.80 million as at Dec. 31, 2016, down 7.21 percent or $93.30 million from $1,294.10 million on Dec. 31, 2015. Current ratio was at 1.82 as on Dec. 31, 2016, down from 1.87 on Dec. 31, 2015.

Cash conversion cycle (CCC) has decreased to 35 days for the quarter from 36 days for the last year period. Days sales outstanding went up to 30 days for the quarter compared with 28 days for the same period last year.

Days inventory outstanding has increased to 32 days for the quarter compared with 30 days for the previous year period. At the same time, days payable outstanding went up to 27 days for the quarter from 22 for the same period last year.