USG Corporation (USG) has reported a 62.19 percent plunge in profit for the quarter ended Dec. 31, 2016. The company has earned $307 million, or $2.07 a share in the quarter, compared with $812 million, or $5.51 a share for the same period last year. On the other hand, adjusted net income for the quarter stood at $65 million, or $0.44 a share compared with $69 million or $0.47 a share, a year ago.
Revenue during the quarter went up marginally by 2.23 percent to $734 million from $718 million in the previous year period. Gross margin for the quarter contracted 254 basis points over the previous year period to 20.44 percent. Total expenses were 91.96 percent of quarterly revenues, up from 86.91 percent for the same period last year. That has resulted in a contraction of 505 basis points in operating margin to 8.04 percent.
Operating income for the quarter was $59 million, compared with $94 million in the previous year period.
However, the adjusted operating income for the quarter stood at $96 million compared to $93 million in the prior year period. At the same time, adjusted operating margin improved 13 basis points in the quarter to 13.08 percent from 12.95 percent in the last year period.
“We are in a stronger financial position than we have been in for many years,” said Jennifer F. Scanlon, president and chief executive officer. “In 2016 we expanded adjusted operating margins in our Gypsum, Ceilings, and USG Boral businesses. We finished the year on a high note by paying off $900 million of debt and today we announced a $250 million share repurchase program to return capital to our shareholders.”
Operating cash flow improves
USG Corporation has generated cash of $373 million from operating activities during the year, up 12.69 percent or $42 million, when compared with the last year.
Cash flow from investing activities was $746 million from investing activities during the year as against cash outgo of $63 million in the last year. It has incurred net capital expenditure of $71 million on net basis during the year, up 144.83 percent or $42 million from year ago.
The company has spent $1,129 million cash to carry out financing activities during the year as against cash outgo of $44 million in the last year period.
Cash and cash equivalents stood at $427 million as on Dec. 31, 2016, down 3.39 percent or $15 million from $442 million on Dec. 31, 2015.
Working capital increases sharply
USG Corporation has recorded an increase in the working capital over the last year. It stood at $527 million as at Dec. 31, 2016, up 28.85 percent or $118 million from $409 million on Dec. 31, 2015. Current ratio was at 2.25 as on Dec. 31, 2016, up from 1.41 on Dec. 31, 2015.
Debt comes down significantly
USG Corporation has recorded a decline in total debt over the last one year. It stood at $1,083 million as on Dec. 31, 2016, down 50.21 percent or $1,092 million from $2,175 million on Dec. 31, 2015. Total debt was 27.99 percent of total assets as on Dec. 31, 2016, compared with 45.92 percent on Dec. 31, 2015. Debt to equity ratio was at 0.57 as on Dec. 31, 2016, down from 1.51 as on Dec. 31, 2015. Interest coverage ratio deteriorated to 1.97 for the quarter from 2.35 for the same period last year.
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