WPX Energy (WPX) swung to a net profit for the quarter ended Mar. 31, 2017. The company has made a net profit of $92 million, or $ 0.22 a share in the quarter, against a net loss of $12 million, or $0.06 a share in the last year period. On the other hand, adjusted net loss for the quarter widened to $59 million, or $0.15 a share from a loss of $58 million or $0.21 a share, a year ago.
Revenue during the quarter surged 113.43 percent to $461 million from $216 million in the previous year period. Gross margin for the quarter expanded 2456 basis points over the previous year period to 75.49 percent. Total expenses were 63.12 percent of quarterly revenues, up from 58.33 percent for the same period last year. That has resulted in a contraction of 479 basis points in operating margin to 36.88 percent.
Operating income for the quarter was $170 million, compared with $90 million in the previous year period.
However, the adjusted EBITDA for the quarter stood at $115 million compared with $131 million in the prior year period. At the same time, adjusted EBITDA margin contracted 3570 basis points in the quarter to 24.95 percent from 60.65 percent in the last year period.
"I like how our growth story is unfolding," said Rick Muncrief, chairman, president and chief executive officer. "WPX 2.0 is all about showing what we can do with an oil-focused portfolio that’s anchored by assets in one of the world’s most prolific plays. The key to achieving our ambitious goals for the next four years is continued, fundamental execution."
Operating cash flow improves
WPX Energy has generated cash of $22 million from operating activities during the quarter, up 15.79 percent or $3 million, when compared with the last year period.
The company has spent $1,033 million cash to meet investing activities during the quarter as against cash inflow of $95 million in the last year period.
Cash flow from financing activities was $657 million for the quarter as against cash outgo of $141 million in the last year period.
Cash and cash equivalents stood at $142 million as on Mar. 31, 2017, up 1,190.91 percent or $131 million from $11 million on Mar. 31, 2016.
Working capital turns negative
Working capital of WPX Energy has turned negative to $160 million on Mar. 31, 2017 from positive $534 million on Mar. 31, 2016. Current ratio was at 0.73 as on Mar. 31, 2017, down from 1.52 on Mar. 31, 2016.
Cash conversion cycle (CCC) has increased to 187 days for the quarter from 86 days for the last year period. Days sales outstanding went down to 47 days for the quarter compared with 106 days for the same period last year.
Days inventory outstanding has decreased to 14 days for the quarter compared with 43 days for the previous year period. At the same time, days payable outstanding went up to 248 days for the quarter from 235 for the same period last year.
Debt comes down
WPX Energy has recorded a decline in total debt over the last one year. It stood at $2,575 million as on Mar. 31, 2017, down 15.57 percent or $475 million from $3,050 million on Mar. 31, 2016. Total debt was 32.55 percent of total assets as on Mar. 31, 2017, compared with 37.47 percent on Mar. 31, 2016. Debt to equity ratio was at 0.61 as on Mar. 31, 2017, down from 0.87 as on Mar. 31, 2016. Interest coverage ratio improved to 3.62 for the quarter from 1.58 for the same period last year.
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