GCP Applied Technologies Inc. (GCP) swung to a net profit for the quarter ended Sep. 30, 2016. The company has made a net profit of $21.30 million, or $ 0.30 a share in the quarter, against a net loss of $15.30 million, or $0.22 a share in the last year period. On an adjusted basis, earnings per share were at $0.35 for the quarter.
Revenue during the quarter dropped 12.11 percent to $342.50 million from $389.70 million in the previous year period. Gross margin for the quarter expanded 278 basis points over the previous year period to 39.71 percent. Total expenses were 85.72 percent of quarterly revenues, up from 68.23 percent for the same period last year. That has resulted in a contraction of 1749 basis points in operating margin to 14.28 percent.
However, the adjusted EBITDA for the quarter stood at $64.60 million compared with $85.60 million in the prior year period. At the same time, adjusted EBITDA margin contracted 310 basis points in the quarter to 18.86 percent from 21.97 percent in the last year period.
"In the third quarter, we delivered strong margins and cash flow while generating stable earnings compared to the prior year quarter excluding the impact of Venezuela. Revenues were impacted by declines in Europe, which were magnified by geopolitical events in the U.K. and Turkey, and a slow start to the quarter in North America," said President and Chief Executive Officer Gregory E. Poling. "By focusing on factors in our control, we delivered an improvement in Adjusted EBIT Margin excluding Venezuela due to increased price, continued productivity and lower raw materials costs. Our year-to-date Adjusted EBIT, excluding Venezuela, increased 11.9% to $164.6 million."
GCP Applied Technologies projects revenue to grow in the range of 1 percent to 3 percent for the financial year 2016. For financial year 2016, the company forecasts diluted earnings per share to be in the range of $1.38 to $1.45 on adjusted basis.
Operating cash flow drops significantly
GCP Applied Technologies has generated cash of $73 million from operating activities during the nine month period, down 28.36 percent or $28.90 million, when compared with the last year period.
The company has spent $32.80 million cash to meet investing activities during the nine month period as against cash inflow of $14.20 million in the last year period
Cash flow from financing activities was $7.10 million for the nine month period as against cash outgo of $84 million in the last year period.
Cash and cash equivalents stood at stood at $148.50 million as at Sep. 30, 2016.
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