O'Reilly Automotive, Inc (ORLY) has reported a 12.56 percent rise in profit for the quarter ended Dec. 31, 2016. The company has earned $246.03 million, or $2.59 a share in the quarter, compared with $218.58 million, or $2.19 a share for the same period last year.
Revenue during the quarter grew 7.71 percent to $2,099.30 million from $1,949.05 million in the previous year period. Gross margin for the quarter expanded 35 basis points over the previous year period to 53.08 percent. Total expenses were 80.58 percent of quarterly revenues, down from 81.40 percent for the same period last year. This has led to an improvement of 82 basis points in operating margin to 19.42 percent.
Operating income for the quarter was $407.71 million, compared with $362.62 million in the previous year period.
“We are very pleased to once again report another profitable quarter and a solid finish to 2016,” commented Greg Henslee, O’Reilly’s chief executive officer. “Our Team’s dedication to providing consistent, unsurpassed levels of customer service drove our comparable store sales growth of 4.8% for the quarter, which is on top of a very strong increase of 7.7% in 2015. Our relentless focus on profitable growth translated this strong top-line performance into a fourth quarter record operating margin of 19.4%, and generated an 18% increase in fourth quarter diluted earnings per share to $2.59, which exceeded the top end of our guidance range for the quarter. I would like to thank our over 74,000 Team Members for their continued hard work and unrelenting focus on providing consistently excellent service to our customers.”
O'Reilly Automotive, Inc projects revenue to be in the range of $9,100 million to $9,300 million for financial year 2017. For fiscal year 2017, the company projects operating income to grow in the range of 20.10 percent to 20.50 percent. The company forecasts diluted earnings per share to be in the range of $2.78 to $2.88 for the first-quarter. For financial year 2017, the company forecasts diluted earnings per share to be in the range of $12.05 to $12.15.
Operating cash flow improves
O'Reilly Automotive, Inc has generated cash of $1,454.17 million from operating activities during the year, up 13.48 percent or $172.69 million, when compared with the last year.
The company has spent $529.10 million cash to meet investing activities during the year as against cash outgo of $407.19 million in the last year. It has incurred net capital expenditure of $471.22 million on net basis during the year, up 14.58 percent or $59.96 million from year ago.
The company has spent $894.77 million cash to carry out financing activities during the year as against cash outgo of $1,008.55 million in the last year period.
Cash and cash equivalents stood at $146.60 million as on Dec. 31, 2016, up 26.05 percent or $30.30 million from $116.30 million on Dec. 31, 2015.
Working capital remains negative
Working capital of O'Reilly Automotive, Inc was negative $142.67 million on Dec. 31, 2016 compared with negative $36.37 million on Dec. 31, 2015. Current ratio was at 0.96 as on Dec. 31, 2016, down from 0.99 on Dec. 31, 2015.
Debt increases substantially
O'Reilly Automotive, Inc has witnessed an increase in total debt over the last one year. It stood at $1,887.02 million as on Dec. 31, 2016, up 35.76 percent or $497 million from $1,390.02 million on Dec. 31, 2015. O Reilly Automotive has witnessed an increase in long-term debt over the last one year. It stood at $1,887.02 million as on Dec. 31, 2016, up 35.76 percent or $497 million from $1,390.02 million on Dec. 31, 2015. Total debt was 26.19 percent of total assets as on Dec. 31, 2016, compared with 20.82 percent on Dec. 31, 2015. Debt to equity ratio was at 1.16 as on Dec. 31, 2016, up from 0.71 as on Dec. 31, 2015. Interest coverage ratio deteriorated to 21.80 for the quarter from 25.70 for the same period last year.
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