Mead Johnson Nutrition Company (MJN) has reported a 3.80 percent fall in profit for the quarter ended Sep. 30, 2016. The company has earned $149.30 million, or $0.80 a share in the quarter, compared with $155.20 million, or $0.77 a share for the same period last year. On an adjusted basis, earnings per share were at $0.87 for the quarter compared with $0.80 in the same period last year. Revenue during the quarter dropped 4.09 percent to $937.50 million from $977.50 million in the previous year period. Gross margin for the quarter contracted 12 basis points over the previous year period to 64.41 percent. Total expenses were 75.66 percent of quarterly revenues, down from 76.88 percent for the same period last year. This has led to an improvement of 122 basis points in operating margin to 24.34 percent.
Operating income for the quarter was $228.20 million, compared with $226 million in the previous year period.
Kasper Jakobsen, chief executive officer, said "We continue to make progress against our global plan. Most critically, we have made substantial progress in China. We are operating in a challenging global environment and it is now clear that our growth will occur more slowly than we had planned. In this environment, we have chosen to revise our full year guidance for both top and bottom line numbers."
For fiscal year 2016, Mead Johnson Nutrition Company forecasts revenue to grow in the range of 6 percent to 7 percent. The company expects diluted earnings per share to be in the range of $2.80 to $2.87. It company expects diluted earnings per share to be in the range of $3.43 to $3.50 on adjusted basis.
Operating cash flow declines
Mead Johnson Nutrition Company has generated cash of $510.70 million from operating activities during the nine month period, down 16.13 percent or $98.20 million, when compared with the last year period. The company has spent $110 million cash to meet investing activities during the nine month period as against cash outgo of $124.80 million in the last year period. It has incurred net capital expenditure of $110 million on net basis during the nine month period, down 11.86 percent or $14.80 million from year ago period.
The company has spent $225.90 million cash to carry out financing activities during the nine month period as against cash outgo of $374 million in the last year period.
Cash and cash equivalents stood at $1,843.20 million as on Sep. 30, 2016, up 35.18 percent or $479.70 million from $1,363.50 million on Sep. 30, 2015.
Working capital increases sharply
Mead Johnson Nutrition Company has recorded an increase in the working capital over the last year. It stood at $1,555.70 million as at Sep. 30, 2016, up 25.30 percent or $314.10 million from $1,241.60 million on Sep. 30, 2015. Current ratio was at 2.24 as on Sep. 30, 2016, up from 2.04 on Sep. 30, 2015.
Cash conversion cycle (CCC) has decreased to 33 days for the quarter from 53 days for the last year period. Days sales outstanding went up to 39 days for the quarter compared with 38 days for the same period last year.
Days inventory outstanding has decreased to 66 days for the quarter compared with 145 days for the previous year period. At the same time, days payable outstanding went up to 137 days for the quarter from 129 for the same period last year.
Debt increases substantially
Mead Johnson Nutrition Company has witnessed an increase in total debt over the last one year. It stood at $3,010.20 million as on Sep. 30, 2016, up 63.53 percent or $1,169.40 million from $1,840.80 million on Sep. 30, 2015. Total debt was 71.78 percent of total assets as on Sep. 30, 2016, compared with 48.73 percent on Sep. 30, 2015. Disclaimer: Please note that this is an auto-generated article. IRIS does not guarantee the accuracy, adequacy or completeness of any information and is not responsible for any errors or omissions or for the results obtained from the use of such information. IRIS especially states that it has no financial liability whatsoever to any user on account of the use of information provided on its website. For queries contact: editor@irisindia.net
