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Praxair, Inc. (PX) has reported 3.79 percent fall in profit for the quarter ended Dec. 31, 2016. The company has earned $406 million, or $1.41 a share in the quarter, compared with $422 million, or $1.47 a share for the same period last year. On an adjusted basis, net profit for the quarter was $406 million, when compared with $422 million in the last year period. Revenue during the quarter went up marginally by 1.89 percent to $2,644 million from $2,595 million in the previous year period. Gross margin for the quarter contracted 95 basis points over the previous year period to 44.10 percent. Total expenses were 77.34 percent of quarterly revenues, up from 75.95 percent for the same period last year. That has resulted in a contraction of 139 basis points in operating margin to 22.66 percent.
Operating income for the quarter was $599 million, compared with $624 million in the previous year period.
However, the adjusted operating income for the quarter stood at $599 million compared to $624 million in the prior year period. At the same time, adjusted operating margin contracted 139 basis points in the quarter to 22.66 percent from 24.05 percent in the last year period.
Commenting on the financial results and business outlook, chairman and chief executive officer Steve Angel said, "During 2016, Praxair employees demonstrated operational excellence by again delivering high-quality results despite facing another challenging global economic year. We gained traction on our core strategy and generated record operating cash flow of 26% of sales and free cash flow of $1.3 billion. As a result, we have announced an increase in our dividend for the 24th consecutive year.
The company projects diluted earnings per share to be in the range of $1.28 to $1.35 for the first-quarter. For financial year 2017, the company projects diluted earnings per share to be in the range of $5.45 to $5.80.
Operating cash flow improves marginally
Praxair, Inc. has generated cash of $2,773 million from operating activities during the year, up 2.89 percent or $78 million, when compared with the last year. The company has spent $1,770 million cash to meet investing activities during the year as against cash outgo of $1,303 million in the last year.
The company has spent $643 million cash to carry out financing activities during the year as against cash outgo of $1,310 million in the last year period.
Cash and cash equivalents stood at $524 million as on Dec. 31, 2016, up 256.46 percent or $377 million from $147 million on Dec. 31, 2015.
Working capital drops significantly
Praxair, Inc. has witnessed a decline in the working capital over the last year. It stood at $402 million as at Dec. 31, 2016, down 45.16 percent or $331 million from $733 million on Dec. 31, 2015. Current ratio was at 1.16 as on Dec. 31, 2016, down from 1.39 on Dec. 31, 2015.
Cash conversion cycle (CCC) has decreased to 17 days for the quarter from 20 days for the last year period. Days sales outstanding were almost stable at 29 days for the quarter, when compared with the last year period.
Days inventory outstanding was almost stable at 17 days for the quarter, when compared with the last year period. At the same time, days payable outstanding went up to 28 days for the quarter from 26 for the same period last year.
Debt moves up marginally
Praxair, Inc. has witnessed an increase in total debt over the last one year. It stood at $9,515 million as on Dec. 31, 2016, up 3.08 percent or $284 million from $9,231 million on Dec. 31, 2015. Total debt was 49.22 percent of total assets as on Dec. 31, 2016, compared with 50.39 percent on Dec. 31, 2015. Debt to equity ratio was at 1.75 as on Dec. 31, 2016, down from 1.93 as on Dec. 31, 2015.
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