WABCO Holdings Inc (WBC) swung to a net profit for the quarter ended Mar. 31, 2017. The company has made a net profit of $80.70 million, or $ 1.48 a share in the quarter, against a net loss of $13.40 million, or $0.24 a share in the last year period. Revenue during the quarter grew 8.51 percent to $747.30 million from $688.70 million in the previous year period. Gross margin for the quarter expanded 97 basis points over the previous year period to 32.14 percent. Total expenses were 85.48 percent of quarterly revenues, down from 86.55 percent for the same period last year. This has led to an improvement of 107 basis points in operating margin to 14.52 percent.
Operating income for the quarter was $108.50 million, compared with $92.60 million in the previous year period.
However, the adjusted operating income for the quarter stood at $114.70 million compared to $101.20 million in the prior year period. At the same time, adjusted operating margin improved 65 basis points in the quarter to 15.35 percent from 14.69 percent in the last year period.
“Overall, Q1 2017 marked yet another quarter of WABCO’s solid outperformance of the commercial vehicle industry relative to global truck and bus production,” said Jacques Esculier, WABCO chairman and chief executive officer.
Wabco Holdings forecasts revenue to be in the range of $2,850 million to $2,990 million for fiscal year 2017. For financial year 2017, the company forecasts operating income to grow in the range of 12.70 percent to 13.10 percent. For fiscal year 2017, the company expects diluted earnings per share to be in the range of $5.23 to $5.73.
Operating cash flow drops significantly
WABCO Holdings Inc has generated cash of $54.30 million from operating activities during the quarter, down 41.74 percent or $ 38.90 million, when compared with the last year period. The company has spent $69.30 million cash to meet investing activities during the quarter as against cash outgo of $53.70 million in the last year period.
The company has spent $61.90 million cash to carry out financing activities during the quarter as against cash inflow of $64.10 million in the last year period.
Cash and cash equivalents stood at $801 million as on Mar. 31, 2017, up 25.80 percent or $164.30 million from $636.70 million on Mar. 31, 2016.
Working capital increases sharply
WABCO Holdings Inc has recorded an increase in the working capital over the last year. It stood at $1,388.80 million as at Mar. 31, 2017, up 33.55 percent or $348.90 million from $1,039.90 million on Mar. 31, 2016. Current ratio was at 3.47 as on Mar. 31, 2017, up from 3.06 on Mar. 31, 2016.
Cash conversion cycle (CCC) has increased to 85 days for the quarter from 80 days for the last year period. Days sales outstanding went up to 76 days for the quarter compared with 70 days for the same period last year.
Days inventory outstanding has decreased to 42 days for the quarter compared with 44 days for the previous year period. At the same time, days payable outstanding was almost stable at 33 days for the quarter, when compared with the previous year period.
Debt increases substantially
WABCO Holdings Inc has witnessed an increase in total debt over the last one year. It stood at $967.50 million as on Mar. 31, 2017, up 52.15 percent or $331.60 million from $635.90 million on Mar. 31, 2016. Total debt was 30.85 percent of total assets as on Mar. 31, 2017, compared with 23.19 percent on Mar. 31, 2016. Debt to equity ratio was at 1.16 as on Mar. 31, 2017, up from 0.80 as on Mar. 31, 2016.
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