Quintiles IMS Holdings (Q) swung to a net loss for the quarter ended Dec. 31, 2016. The company has made a net loss of $178 million, or $ 0.74 a share in the quarter, against a net profit of $105 million, or $0.85 a share in the last year period. On the other hand, adjusted net income for the quarter stood at $266 million, or $1.09 a share compared with $111.40 million or $0.90 a share, a year ago.
Revenue during the quarter surged 53.61 percent to $2,338 million from $1,522 million in the previous year period. Gross margin for the quarter expanded 730 basis points over the previous year period to 36.01 percent. Total expenses were 93.84 percent of quarterly revenues, up from 88.30 percent for the same period last year. That has resulted in a contraction of 554 basis points in operating margin to 6.16 percent.
Operating income for the quarter was $144 million, compared with $178 million in the previous year period.
However, the adjusted EBITDA for the quarter stood at $541 million compared with $231 million in the prior year period. At the same time, adjusted EBITDA margin improved 796 basis points in the quarter to 23.14 percent from 15.18 percent in the last year period.
"For our first quarter as a combined company, we delivered a strong operational performance and achieved financial results in line with or above our targets," said Ari Bousbib, chairman and chief executive officer, QuintilesIMS. "The post-merger integration process is advancing well and we are pleased with our progress to date."
For the first-quarter 2017, Quintiles IMS Holdings projects revenue to be in the range of $1,890 million to $1,925 million. On an adjusted basis, the company forecasts diluted earnings per share to be in the range of $0.93 to $0.97.
For financial year 2017, Quintiles IMS Holdings projects revenue to be in the range of $8,000 million to $8,100 million. The company forecasts diluted earnings per share to be in the range of $4.40 to $4.55 on adjusted basis.
Operating cash flow improves significantly
Quintiles IMS Holdings has generated cash of $860 million from operating activities during the year, up 80.67 percent or $384 million, when compared with the last year.
Cash flow from investing activities was $1,731 million from investing activities during the year as against cash outgo of $67 million in the last year.
The company has spent $2,284 million cash to carry out financing activities during the year as against cash outgo of $249 million in the last year period.
Cash and cash equivalents stood at $1,198 million as on Dec. 31, 2016, up 22.62 percent or $221 million from $977 million on Dec. 31, 2015.
Working capital declines
Quintiles IMS Holdings has witnessed a decline in the working capital over the last year. It stood at $632 million as at Dec. 31, 2016, down 22.72 percent or $185.81 million from $817.81 million on Dec. 31, 2015. Current ratio was at 1.23 as on Dec. 31, 2016, down from 1.51 on Dec. 31, 2015.
Debt increases substantially
Quintiles IMS Holdings has witnessed an increase in total debt over the last one year. It stood at $7,200 million as on Dec. 31, 2016, up 191.73 percent or $4,732 million from $2,468 million on Dec. 31, 2015. Total debt was 33.95 percent of total assets as on Dec. 31, 2016, compared with 62.86 percent on Dec. 31, 2015. Interest coverage ratio deteriorated to 2.03 for the quarter from 6.85 for the same period last year.
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