Pitney Bowes Inc. (PBI) has reported a 25.32 percent fall in profit for the quarter ended Sep. 30, 2016. The company has earned $70.10 million, or $0.35 a share in the quarter, compared with $93.88 million, or $0.44 a share for the same period last year. On an adjusted basis, earnings per share were at $0.44 for the quarter compared with $0.43 in the same period last year.
Revenue during the quarter dropped 3.51 percent to $839.03 million from $869.54 million in the previous year period. Gross margin for the quarter contracted 167 basis points over the previous year period to 55.07 percent. Total expenses were 86.19 percent of quarterly revenues, up from 82.18 percent for the same period last year. That has resulted in a contraction of 401 basis points in operating margin to 13.81 percent.
However, the adjusted EBITDA for the quarter stood at $196.61 million compared with $214.84 million in the prior year period. At the same time, adjusted EBITDA margin contracted 127 basis points in the quarter to 23.43 percent from 24.71 percent in the last year period.
"We continued to make progress against our strategic initiatives to transform Pitney Bowes," said Marc B. Lautenbach, president and chief executive officer. "Our new enterprise business platform, which was deployed in the second quarter, continues to provide operational benefits, while our new products and solutions introduced in the second and third quarter tied to the Pitney Bowes Commerce Cloud are resonating well with our clients and gaining traction."
For fiscal year 2016, Pitney Bowes Inc. expects diluted earnings per share to be in the range of $1.75 to $1.82 on adjusted basis.
Working capital turns positive
Working capital of Pitney Bowes Inc. has turned positive to $336.19 million on Sep. 30, 2016 from negative $35.84 million on Sep. 30, 2015. Current ratio was at 1.16 as on Sep. 30, 2016, up from 0.98 on Sep. 30, 2015.
Days sales outstanding went up to 148 days for the quarter compared with 146 days for the same period last year.
Days inventory outstanding has decreased to 13 days for the quarter compared with 25 days for the previous year period.
Debt moves up
Pitney Bowes Inc. has witnessed an increase in total debt over the last one year. It stood at $3,367.06 million as on Sep. 30, 2016, up 12.53 percent or $374.91 million from $2,992.15 million on Sep. 30, 2015. Total debt was 53.80 percent of total assets as on Sep. 30, 2016, compared with 48.72 percent on Sep. 30, 2015. Debt to equity ratio was at 7.89 as on Sep. 30, 2016, down from 21.07 as on Sep. 30, 2015. Interest coverage ratio deteriorated to 5.20 for the quarter from 7.68 for the same period last year.
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