Alliance Data Systems Corporation (ADS) has reported a 6.81 percent fall in profit for the quarter ended Mar. 31, 2017. The company has earned $146.40 million, or $2.58 a share in the quarter, compared with $157.10 million, or $2.35 a share for the same period last year.
Revenue during the quarter grew 12.11 percent to $1,879 million from $1,676.10 million in the previous year period. Gross margin for the quarter expanded 371 basis points over the previous year period to 42.17 percent. Total expenses were 81.25 percent of quarterly revenues, up from 79.46 percent for the same period last year. That has resulted in a contraction of 179 basis points in operating margin to 18.75 percent.
Operating income for the quarter was $352.40 million, compared with $344.30 million in the previous year period.
However, the adjusted EBITDA for the quarter stood at $500.70 million compared with $492.60 million in the prior year period. At the same time, adjusted EBITDA margin contracted 274 basis points in the quarter to 26.65 percent from 29.39 percent in the last year period.
Ed Heffernan, president and chief executive officer of Alliance Data, commented, "We reported 12 percent revenue and 2 percent core EPS growth for the first quarter of 2017, which was slightly better than our expectations for high-single-digit revenue growth and flat core EPS. Additionally, segment balance improved during the quarter as continued strong growth at Card Services was accompanied by 7 percent revenue growth at Epsilon ��" its strongest organic growth rate since the fourth quarter of 2015. Our final segment, LoyaltyOne®, remains on-track to return to solid growth by the third quarter of 2017, as we restore the lost profitability at AIR MILES® resulting from the breakage estimate reset in the fourth quarter of 2016."
For fiscal year 2017, Alliance Data Systems Corporation forecasts revenue to be $7,700 million. The company projects diluted earnings per share to be $18.50 on adjusted basis.
Operating cash flow improves significantly
Alliance Data Systems Corporation has generated cash of $487.50 million from operating activities during the quarter, up 74.04 percent or $207.40 million, when compared with the last year period.
Cash flow from investing activities was $281 million for the quarter as against cash outgo of $747.70 million in the last year period.
The company has spent $762.90 million cash to carry out financing activities during the quarter as against cash inflow of $263.70 million in the last year period.
Cash and cash equivalents stood at $1,866.80 million as on Mar. 31, 2017, up 92.45 percent or $896.80 million from $970 million on Mar. 31, 2016.
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