Computer Task Group (CTGX) swung to a net profit for the quarter ended Mar. 31, 2017. The company has made a net profit of $0.75 million, or $ 0.05 a share in the quarter, against a net loss of $20.86 million, or $1.34 a share in the last year period.
Revenue during the quarter dropped 10.30 percent to $77.01 million from $85.85 million in the previous year period. Gross margin for the quarter expanded 154 basis points over the previous year period to 18.48 percent. Operating margin for the quarter period stood at positive 1.70 percent as compared to a negative 23.84 percent for the previous year period.
Operating income for the quarter was $1.31 million, compared with an operating loss of $20.47 million in the previous year period.
CTG chief executive officer, Bud Crumlish, commented, "Our business performed well during the first quarter with both revenue and earnings at the mid-point of our guidance range as we continued to execute on our long-term strategic plan. Revenue from Solutions increased on a sequential basis, partially offset by an expected, modest decline in our Staffing business. The decline in Staffing was a result of the previous reduction in business at our largest staffing client. Highlighting the quarter, our business in Europe achieved sequential and year-over-year growth, setting a record in terms of percentage of total CTG revenue."
For the second-quarter 2017, Computer Task Group forecasts revenue to be in the range of $77 million to $79 million. The company forecasts operating income to grow in the range of 1.70 percent to 1.90 percent. The company expects diluted earnings per share to be in the range of $0.04 to $0.06.
For financial year 2017, Computer Task Group forecasts revenue to be in the range of $312 million to $332 million for fiscal year 2017. The company forecasts operating income to grow at 1.90 percent. The company expects diluted earnings per share to be in the range of $0.19 to $0.29.
Operating cash flow improves significantly Computer Task Group has generated cash of $8.46 million from operating activities during the quarter, up 1,334.24 percent or $7.87 million, when compared with the last year period.
The company has spent $0.80 million cash to meet investing activities during the quarter as against cash outgo of $1.13 million in the last year period.
The company has spent $7.09 million cash to carry out financing activities during the quarter as against cash outgo of $1.20 million in the last year period.
Cash and cash equivalents stood at $10.10 million as on Mar. 31, 2017, up 7.14 percent or $0.67 million from $9.43 million on Apr. 01, 2016.
Working capital declines
Computer Task Group has witnessed a decline in the working capital over the last year. It stood at $47.44 million as at Mar. 31, 2017, down 10.26 percent or $5.43 million from $52.87 million on Apr. 01, 2016. Current ratio was at 2.45 as on Mar. 31, 2017, down from 2.49 on Apr. 01, 2016.
Days sales outstanding went up to 81 days for the quarter compared with 79 days for the same period last year.
At the same time, days payable outstanding went up to 10 days for the quarter from 9 for the same period last year.
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