Jazz Pharmaceuticals plc (JAZZ) has reported a 41 percent jump in profit for the quarter ended Dec. 31, 2016. The company has earned $116.69 million, or $1.91 a share in the quarter, compared with $82.76 million, or $1.32 a share for the same period last year. On the other hand, adjusted net income for the quarter stood at $165.64 million, or $2.71 a share compared with $176.52 million or $2.81 a share, a year ago. Revenue during the quarter grew 16.35 percent to $396.62 million from $340.88 million in the previous year period. Gross margin for the quarter contracted 144 basis points over the previous year period to 91.51 percent. Total expenses were 58.27 percent of quarterly revenues, down from 68.72 percent for the same period last year. This has led to an improvement of 1045 basis points in operating margin to 41.73 percent.
Operating income for the quarter was $165.50 million, compared with $106.63 million in the previous year period.
"In 2016, we delivered solid growth for two of our key products, Xyrem and Defitelio, completed multiple corporate development transactions, including the Celator acquisition, received NDA approval and launched Defitelio in the U.S., began the rolling NDA submission for Vyxeos, and advanced and expanded our development pipeline, including two new oxybate product candidates that may offer new therapeutic options for narcolepsy patients," said Bruce Cozadd, chairman and chief executive officer of Jazz Pharmaceuticals. "We are looking forward to a busy and productive 2017, building on our investments in internal and acquired R&D programs over the last few years. We believe that 2017 will be an exciting year for Jazz as we remain focused on delivering new and improved therapeutic options for patients and value to shareholders through expansion of our business."
For fiscal year 2017, Jazz Pharmaceuticals plc projects revenue to be in the range of $1,625 million to $1,700 million. It expects net income to be in the range of $400 million to $460 million. It forecasts adjusted net income to be in the range of $650 million to $690 million. It forecasts diluted earnings per share to be in the range of $6.55 to $7.55. It forecasts diluted earnings per share to be in the range of $10.70 to $11.30 on adjusted basis for the same period.
Working capital drops significantly
Jazz Pharmaceuticals plc has witnessed a decline in the working capital over the last year. It stood at $490.66 million as at Dec. 31, 2016, down 52.41 percent or $540.36 million from $1,031.02 million on Dec. 31, 2015. Current ratio was at 2.91 as on Dec. 31, 2016, down from 5.55 on Dec. 31, 2015. Cash conversion cycle (CCC) has increased to 43 days for the quarter from 24 days for the last year period. Days sales outstanding went down to 27 days for the quarter compared with 28 days for the same period last year.
Days inventory outstanding has increased to 47 days for the quarter compared with 37 days for the previous year period. At the same time, days payable outstanding went down to 31 days for the quarter from 42 for the same period last year.
Debt increases substantially
Jazz Pharmaceuticals plc has witnessed an increase in total debt over the last one year. It stood at $2,029.62 million as on Dec. 31, 2016, up 70.78 percent or $841.18 million from $1,188.44 million on Dec. 31, 2015. Total debt was 42.28 percent of total assets as on Dec. 31, 2016, compared with 35.37 percent on Dec. 31, 2015. Debt to equity ratio was at 1.08 as on Dec. 31, 2016, up from 0.74 as on Dec. 31, 2015. Interest coverage ratio deteriorated to 8.65 for the quarter from 8.73 for the same period last year.
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