Intuit Inc. (INTU) has reported a 45.83 percent plunge in profit for the quarter ended Jan. 31, 2017. The company has earned $13 million, or $0.05 a share in the quarter, compared with $24 million, or $0.09 a share for the same period last year. On an adjusted basis, net profit for the quarter was stable at $67 million, or $0.26 a share, when compared with the last year period.
Revenue during the quarter grew 10.08 percent to $1,016 million from $923 million in the previous year period. Gross margin for the quarter expanded 93 basis points over the previous year period to 80.02 percent. Total expenses were 97.83 percent of quarterly revenues, up from 95.45 percent for the same period last year. That has resulted in a contraction of 239 basis points in operating margin to 2.17 percent.
Operating income for the quarter was $22 million, compared with $42 million in the previous year period.
However, the adjusted operating income for the quarter stood at $106 million compared to $114 million in the prior year period. At the same time, adjusted operating margin contracted 192 basis points in the quarter to 10.43 percent from 12.35 percent in the last year period.
"Our second fiscal quarter results reflect strong momentum across the business," said Brad Smith, Intuit's chairman and chief executive officer. "We continue to be pleased with how our long-term strategy in Small Business is playing out, driving momentum for the QuickBooks Online ecosystem. Our Small Business results are bolstered by product and platform innovation, improved product market fit outside of the U.S., and further expansion of our addressable market by targeting the self-employed segment." "We are also in the midst of another highly competitive tax season. While the industry came out of the gates a bit slow, we are confident we have a strong and winning hand that combines innovation across the end-to-end experience, an effective marketing campaign, and great value for taxpayers."
For fiscal year 2017, Intuit Inc. expects revenue to be in the range of $5,000 million to $5,100 million. The company expects operating income to be in the range of $1,330 million to $1,380 million. The company expects adjusted operating income to be in the range of $1,675 million to $1,725 million. The company projects diluted earnings per share to be in the range of $3.47 to $3.69. The company projects diluted earnings per share to be in the range of $4.30 to $4.40 on adjusted basis.
For the third-quarter 2017, Intuit Inc. expects revenue to be in the range of $2,500 million to $2,550 million. The company expects operating income to be in the range of $1,420 million to $1,440 million. The company expects adjusted operating income to be in the range of $1,500 million to $1,520 million. The company projects diluted earnings per share to be in the range of $3.61 to $3.6. On an adjusted basis, the company projects diluted earnings per share to be in the range of $3.85 to $3.90.
Operating cash flow drops significantly
Intuit Inc. has generated cash of $87 million from operating activities during the first half, down 32.56 percent or $42 million, when compared with the last year period.
Cash flow from investing activities was $43 million for the first half, down 91.28 percent or $450 million, when compared with the last year period.
The company has spent $375 million cash to carry out financing activities during the first six months as against cash outgo of $1,085 million in the last year period.
Cash and cash equivalents stood at $392 million as on Jan. 31, 2017, up 17.37 percent or $58 million from $334 million on Jan. 31, 2016.
Working capital remains negative
Working capital of Intuit Inc. was negative $1,124 million on Jan. 31, 2017 compared with negative $882 million on Jan. 31, 2016. Current ratio was at 0.60 as on Jan. 31, 2017, down from 0.62 on Jan. 31, 2016.
Days sales outstanding went down to 25 days for the quarter compared with 31 days for the same period last year.
At the same time, days payable outstanding went down to 58 days for the quarter from 68 for the same period last year.
Debt comes down
Intuit Inc. has recorded a decline in total debt over the last one year. It stood at $1,150 million as on Jan. 31, 2017, down 7.63 percent or $95 million from $1,245 million on Jan. 31, 2016. Total debt was 26.30 percent of total assets as on Jan. 31, 2017, compared with 28.63 percent on Jan. 31, 2016. Debt to equity ratio was at 1.46 as on Jan. 31, 2017, down from 1.94 as on Jan. 31, 2016. Interest coverage ratio deteriorated to 2 for the quarter from 4.67 for the same period last year.
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