Revenue during the quarter grew 6.43 percent to $713.70 million from $670.60 million in the previous year period. Gross margin for the quarter expanded 74 basis points over the previous year period to 30.53 percent. Total expenses were 87.24 percent of quarterly revenues, down from 88.83 percent for the same period last year. This has led to an improvement of 160 basis points in operating margin to 12.76 percent.

Operating income for the quarter was $91.10 million, compared with $74.90 million in the previous year period.

However, the adjusted operating income for the quarter stood at $102.80 million compared to $87.80 million in the prior year period. At the same time, adjusted operating margin improved 131 basis points in the quarter to 14.40 percent from 13.09 percent in the last year period.

“In Q4 2016, we continued to increase market penetration in key regions, such as China, the world’s largest market for commercial vehicles, where in particular we augmented adoption of WABCO anti-lock braking systems on light- and medium-duty trucks,” said Jacques Esculier, WABCO Chairman and Chief Executive Officer.

WABCO Holdings Inc projects revenue to be in the range of $2,850 million to $2,990 million for financial year 2017. For fiscal year 2017, the company projects operating income to grow in the range of 12.70 percent to 13.10 percent. For financial year 2017, the company forecasts diluted earnings per share to be in the range of $5.23 to $5.73.

The company has spent $251.80 million cash to meet investing activities during the year as against cash outgo of $202.20 million in the last year. It has incurred net capital expenditure of $107 million on net basis during the year, up 6.36 percent or $6.40 million from year ago.

Cash flow from financing activities was $220.60 million for the year as against cash outgo of $54 million in the last year period.

Cash and cash equivalents stood at $862.50 million as on Dec. 31, 2016, up 67.41 percent or $347.30 million from $515.20 million on Dec. 31, 2015.

Working capital increases sharply
WABCO Holdings Inc has recorded an increase in the working capital over the last year. It stood at $1,343.10 million as at Dec. 31, 2016, up 45.74 percent or $421.50 million from $921.60 million on Dec. 31, 2015. Current ratio was at 3.53 as on Dec. 31, 2016, up from 2.98 on Dec. 31, 2015.

Cash conversion cycle (CCC) has increased to 44 days for the quarter from 42 days for the last year period. Days sales outstanding went up to 39 days for the quarter compared with 37 days for the same period last year.

Days inventory outstanding was almost stable at 21 days for the quarter, when compared with the last year period. At the same time, days payable outstanding was almost stable at 16 days for the quarter, when compared with the previous year period.