SolarEdge Technologies Inc (SEDG) has reported a 31.85 percent plunge in profit for the quarter ended Mar. 31, 2017. The company has earned $14.18 million, or $0.32 a share in the quarter, compared with $20.80 million, or $0.47 a share for the same period last year. On the other hand, adjusted net income for the quarter stood at $16.46 million, or $0.36 a share compared with $23.33 million or $0.51 a share, a year ago. Revenue during the quarter dropped 8.11 percent to $115.05 million from $125.20 million in the previous year period. Gross margin for the quarter expanded 108 basis points over the previous year period to 33.62 percent. Total expenses were 89.57 percent of quarterly revenues, up from 84.23 percent for the same period last year. That has resulted in a contraction of 533 basis points in operating margin to 10.43 percent.
Operating income for the quarter was $12 million, compared with $19.74 million in the previous year period.
However, the adjusted operating income for the quarter stood at $15.62 million compared to $22.37 million in the prior year period. At the same time, adjusted operating margin contracted 429 basis points in the quarter to 13.57 percent from 17.87 percent in the last year period.
“In a quarter where the PV market is exhibiting decline in the United States, we have increased our revenues, profitability and cash flow generation quarter over quarter. Much of this is attributed to increased sales in Europe and our growing worldwide geographic spread,” said Guy Sella, founder, chairman and chief executive officer of SolarEdge. “We are confident that with our financial strength, cash balance and substantial R&D capabilities, we are well positioned to continue to increase revenues in existing markets and new markets as we see fit.”
For the second-quarter, SolarEdge Technologies expects revenue to be in the range of $120 million to $130 million.
Operating cash flow improves significantly
SolarEdge Technologies Inc has generated cash of $25.67 million from operating activities during the quarter, up 67.29 percent or $10.32 million, when compared with the last year period. The company has spent $10.44 million cash to meet investing activities during the quarter as against cash outgo of $38.47 million in the last year period.
Cash flow from financing activities was $0.37 million for the quarter, down 68.21 percent or $0.80 million, when compared with the last year period.
Cash and cash equivalents stood at $119.93 million as on Mar. 31, 2017, up 42.66 percent or $35.86 million from $84.07 million on Mar. 31, 2016.
Working capital increases sharply
SolarEdge Technologies Inc has recorded an increase in the working capital over the last year. It stood at $290.85 million as at Mar. 31, 2017, up 39.90 percent or $82.95 million from $207.90 million on Mar. 31, 2016. Current ratio was at 4.70 as on Mar. 31, 2017, up from 3.55 on Mar. 31, 2016.
Cash conversion cycle (CCC) has decreased to 41 days for the quarter from 42 days for the last year period. Days sales outstanding went up to 31 days for the quarter compared with 20 days for the same period last year.
Days inventory outstanding has decreased to 36 days for the quarter compared with 46 days for the previous year period. At the same time, days payable outstanding went up to 26 days for the quarter from 24 for the same period last year.
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