Comverse (CNSI), the telecom business enablement solutions provider, has reported a 46.40 percent jump in profit for the quarter ended Jan. 31, 2014 on the back of income tax benefit.
The company earned $15.78 million or $0.70 a share in the fourth-quarter, compared with $10.78 million or $0.49 a share a year ago. It recorded income tax benefit of $14.26 million compared with benefit of $5.57 million in the same period last year.
Revenue during the fourth-quarter fell 9.30 percent to $166.51 million from $183.59 million in the last year period.
Gross margin contracted by 478 basis points over the last year period to 32.65 percent. Total expenses as a percentage of revenues increased to 97.76 percent from 96.96 percent in the same period last year. That resulted in contraction of 81 basis points in operating margin to 2.24 percent.
The company posted operating income of $3.72 million, compared with an operating income of $5.59 million in the previous year period.
"During fiscal 2013, we were pleased with the realignment of our product and services portfolio in supporting the transition to IP, cloud-based offerings in Digital Services; the extension of our Kenan initiatives and Comverse One industrialization; and our enhanced managed services deployment," said Philippe Tartavull, President & CEO of Comverse, Inc.
"We have grown year-over-year product bookings in two of our three geographies. However, we faced significant softness in our Asia Pacific region resulting in an overall decline in bookings compared to fiscal 2012. This softness was primarily a function of the overall economic conditions in India and a delay in orders with a large customer in the region. We believe we have a tremendous portfolio of products and a significant install base to drive future growth."
Cash flow
Comverse has generated cash of $6.62 million from operating activities during the year, down 75.40 percent or $20.29 million when compared with the last year period. It has generated 1.01 cents of operating cash flow in every sales dollar for the year, down from 3.97 cents for the same period last year.
The company has spent $38.30 million in cash to meet investing activities during the year, as against cash outgo of $4.48 million in the year period. It has made net capital expenditure of $12.34 million during the year, which was higher by 88.90 percent or $5.81 million from a year ago.
The company has generated cash of $25.12 million from financing activities during the year, down 49 percent or $24.13 million, when compared with the last year period.
It has raised net of $24 million by issuing common stocks.
As on Jan. 31, 2014, Comverse's cash balance stood at $254.58 million, down 3.17 percent or $8.34 million from Jan. 31, 2013.
Working Capital
Comverse witnessed an increase in the working capital. It stood at $19.04 million as at Jan. 31, 2014, up $14.32 million or 303.28 percent from $4.72 million on Jan. 31, 2013. The company's current ratio increased to 1.05 as at Jan. 31, 2014 from 1 on Jan. 31, 2013.
Shares of Comverse rose $6.46 or 19.01 percent to close at $27.52 on Tuesday.
