The Toro Company (TTC) has reported a 28.34 percent rise in profit for the quarter ended Oct. 31, 2016. The company has earned $30.23 million, or $0.27 a share in the quarter, compared with $23.55 million, or $0.21 a share for the same period last year. Revenue during the quarter went down marginally by 2.59 percent to $468.36 million from $480.81 million in the previous year period. Gross margin for the quarter contracted 169 basis points over the previous year period to 63.25 percent. Total expenses were 90.71 percent of quarterly revenues, down from 92.34 percent for the same period last year. This has led to an improvement of 163 basis points in operating margin to 9.29 percent.
Operating income for the quarter was $43.51 million, compared with $36.83 million in the previous year period.
"We are pleased to announce record earnings for fiscal 2016, driven by consistent performance and growth in our professional businesses," said Richard M. Olson, Toro’s president and chief executive officer. "New product introductions across the portfolio were favorably received and we made notable progress in reducing our inventory levels. Despite challenges presented by negative currency conditions and a lack of in-season snowfall, we benefitted from solid demand for our golf equipment and irrigation products and we gained share in those markets. Similarly, we saw increased momentum in our landscape contractor, specialty construction and rental businesses due to the success of new products such as the TITAN® HD zero turn mower and the Dingo® TX 1000."
For financial year 2017, The Toro Company expects revenue to grow in the range of 3 percent to 4 percent. The company projects diluted earnings per share to be in the range of $2.20 to $2.26.
For the first-quarter 2017, The Toro Company projects diluted earnings per share to be in the range of $0.34 to $0.36.
Operating cash flow improves significantly
The Toro Company has generated cash of $361.94 million from operating activities during the year, up 52.80 percent or $125.07 million, when compared with the last year. The company has spent $39.06 million cash to meet investing activities during the year as against cash outgo of $250.26 million in the last year. It has incurred net capital expenditure of $50.41 million on net basis during the year, down 10.29 percent or $5.78 million from year ago.
The company has spent $170.44 million cash to carry out financing activities during the year as against cash outgo of $173.36 million in the last year period.
Cash and cash equivalents stood at $273.56 million as on Oct. 31, 2016, up 116.63 percent or $147.28 million from $126.28 million on Oct. 31, 2015.
Debt comes down
The Toro Company has recorded a decline in total debt over the last one year. It stood at $353.91 million as on Oct. 31, 2016, down 6.42 percent or $24.27 million from $378.17 million on Oct. 31, 2015. Total debt was 25.51 percent of total assets as on Oct. 31, 2016, compared with 29.01 percent on Oct. 31, 2015. Debt to equity ratio was at 0.64 as on Oct. 31, 2016, down from 0.82 as on Oct. 31, 2015. Interest coverage ratio improved to 8.19 for the quarter from 7.86 for the same period last year.
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