SPX Corporation (SPW) swung to a net profit for the quarter ended Oct. 01, 2016. The company has made a net profit of $1.90 million, or $ 0.04 a share in the quarter, against a net loss of $105 million, or $2.58 a share in the last year period.
Revenue during the quarter went up marginally by 2.97 percent to $385.20 million from $374.10 million in the previous year period. Gross margin for the quarter expanded 2103 basis points over the previous year period to 21.81 percent. Operating margin for the quarter period stood at positive 1.84 percent as compared to a negative 30.37 percent for the previous year period.
Operating income for the quarter was $7.10 million, compared with an operating loss of $113.60 million in the previous year period.
However, the adjusted operating income for the quarter stood at $10 million compared to $14.20 million in the prior year period. At the same time, adjusted operating margin contracted 120 basis points in the quarter to 2.60 percent from 3.80 percent in the last year period.
Gene Lowe, President and CEO, remarked, "Overall, I’m proud of our company’s execution for the quarter in the face of headwinds in certain end markets. Our strategic platforms continued to perform well and the operational initiatives we have been implementing across our company have helped to drive structural improvements in the margin profile of our businesses. While HVAC heating orders were softer than anticipated, our net profit for the third quarter was roughly in-line with our internal forecast."
SPX is adjusting its 2016 guidance for Core revenue* to a range of $1.5 billion to $1.6 billion from the previous range of $1.5 billion to $1.7 billion. We expect Core segment income margin* to be towards the lower end of the previously provided range of 9% to 10%. We also expect adjusted operating income* to be towards the lower end of the previously provided range of $80 to $100 million. SPX is narrowing its adjusted earnings per share* range to $1.00 to $1.20 from $0.95 to $1.25.
Operating cash flow remains negative
SPX Corporation has spent $45.60 million cash to meet operating activities during the nine month period as against cash outgo of $114 million in the last year period.
Cash flow from investing activities was $37.60 million for the nine month period as against cash outgo of $49.10 million in the last year period.
The company has spent $13.10 million cash to carry out financing activities during the nine month period as against cash outgo of $124.20 million in the last year period.
Cash and cash equivalents stood at $83.40 million as on Oct. 01, 2016, up 1.09 percent or $0.90 million from $82.50 million on Sep. 26, 2015.
Working capital drops significantly
SPX Corporation has witnessed a decline in the working capital over the last year. It stood at $94.30 million as at Oct. 01, 2016, down 25.57 percent or $32.40 million from $126.70 million on Sep. 26, 2015. Current ratio was at 1.18 as on Oct. 01, 2016, up from 1.17 on Sep. 26, 2015.
Cash conversion cycle (CCC) has decreased to 101 days for the quarter from 198 days for the last year period. Days sales outstanding went down to 165 days for the quarter compared with 184 days for the same period last year.
Days inventory outstanding has decreased to 27 days for the quarter compared with 93 days for the previous year period. At the same time, days payable outstanding went up to 91 days for the quarter from 79 for the same period last year.
Debt comes down
SPX Corporation has recorded a decline in total debt over the last one year. It stood at $364 million as on Oct. 01, 2016, down 13.74 percent or $58 million from $422 million on Sep. 26, 2015. Total debt was 18.30 percent of total assets as on Oct. 01, 2016, compared with 18.52 percent on Sep. 26, 2015. Debt to equity ratio was almost stable at 1.33 as on Oct. 01, 2016, when compared with the last year.
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