Ubiquiti Networks, Inc. (UBNT) has reported 22.56 percent rise in profit for the quarter ended Dec. 31, 2016. The company has earned $60.61 million, or $0.72 a share in the quarter, compared with $49.45 million, or $0.57 a share for the same period last year. On the other hand, adjusted net income for the quarter stood at $60.09 million, or $0.72 a share compared with $49.72 million or $0.58 a share, a year ago.
Revenue during the quarter surged 31.92 percent to $213.54 million from $161.87 million in the previous year period. Gross margin for the quarter contracted 428 basis points over the previous year period to 44.55 percent. Total expenses were 67.31 percent of quarterly revenues, up from 65.14 percent for the same period last year. That has resulted in a contraction of 218 basis points in operating margin to 32.69 percent.
Operating income for the quarter was $69.80 million, compared with $56.44 million in the previous year period.
For the third-quarter, Ubiquiti Networks forecasts revenue to be in the range of $210 million to $220 million. The company expects diluted earnings per share to be in the range of $0.72 to $0.78. On an adjusted basis, the company expects diluted earnings per share to be in the range of $0.73 to $0.79.
Working capital increases sharply
Ubiquiti Networks, Inc. has recorded an increase in the working capital over the last year. It stood at $767.31 million as at Dec. 31, 2016, up 39.67 percent or $217.93 million from $549.38 million on Dec. 31, 2015. Current ratio was at 7.43 as on Dec. 31, 2016, down from 8.79 on Dec. 31, 2015.
Cash conversion cycle (CCC) has increased to 40 days for the quarter from 35 days for the last year period. Days sales outstanding went up to 39 days for the quarter compared with 36 days for the same period last year.
Days inventory outstanding has increased to 41 days for the quarter compared with 35 days for the previous year period. At the same time, days payable outstanding went up to 39 days for the quarter from 37 for the same period last year.
Debt increases substantially
Ubiquiti Networks, Inc. has witnessed an increase in total debt over the last one year. It stood at $197.69 million as on Dec. 31, 2016, up 57.52 percent or $72.19 million from $125.50 million on Dec. 31, 2015. Total debt was 21.83 percent of total assets as on Dec. 31, 2016, compared with 19.71 percent on Dec. 31, 2015. Debt to equity ratio was at 0.34 as on Dec. 31, 2016, up from 0.29 as on Dec. 31, 2015.
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