Viavi Solutions Inc. (VIAV) has reported an 1,130 percent jump in profit for the quarter ended Dec. 31, 2016. The company has earned $49.20 million, or $0.21 a share in the quarter, compared with $4 million, or $0.02 a share for the same period last year. On the other hand, adjusted net income for the quarter stood at $23.60 million, or $0.10 a share compared with $25 million or $0.11 a share, a year ago.
Revenue during the quarter dropped 11.03 percent to $206.50 million from $232.10 million in the previous year period. Gross margin for the quarter contracted 71 basis points over the previous year period to 60.39 percent. Total expenses were 96.76 percent of quarterly revenues, up from 96.04 percent for the same period last year. That has resulted in a contraction of 72 basis points in operating margin to 3.24 percent.
Operating income for the quarter was $6.70 million, compared with $9.20 million in the previous year period.
However, the adjusted EBITDA for the quarter stood at $34.50 million compared with $39.20 million in the prior year period. At the same time, adjusted EBITDA margin contracted 18 basis points in the quarter to 16.71 percent from 16.89 percent in the last year period.
"We are pleased with our fiscal 2Q results as we exceeded our EPS guidance range and delivered non-GAAP EPS at $0.10," said Oleg Khaykin, Viavi's President and Chief Executive Officer. "This was driven by good execution in NSE and OSP as both business segments exceeded the high end of the non-GAAP operating margin guidance."
For the third-quarter,Viavi Solutions Inc. forecasts adjusted revenue to be in the range of $188 million to $204 million. On an adjusted basis, the company expects diluted earnings per share to be in the range of $0.06 to $0.08.
Working capital increases
Viavi Solutions Inc. has recorded an increase in the working capital over the last year. It stood at $1,029.90 million as at Dec. 31, 2016, up 10.13 percent or $94.70 million from $935.20 million on Jan. 02, 2016. Current ratio was at 5.20 as on Dec. 31, 2016, up from 4.54 on Jan. 02, 2016.
Cash conversion cycle (CCC) has decreased to 52 days for the quarter from 83 days for the last year period. Days sales outstanding went up to 71 days for the quarter compared with 66 days for the same period last year.
Days inventory outstanding has decreased to 26 days for the quarter compared with 58 days for the previous year period. At the same time, days payable outstanding went up to 46 days for the quarter from 42 for the same period last year.
Debt moves up marginally
Viavi Solutions Inc. has witnessed an increase in total debt over the last one year. It stood at $598.30 million as on Dec. 31, 2016, up 4.09 percent or $23.50 million from $574.80 million on Jan. 02, 2016. Jds Uniphase Corp has witnessed an increase in long-term debt over the last one year. It stood at $598.30 million as on Dec. 31, 2016, up 4.09 percent or $23.50 million from $574.80 million on Jan. 02, 2016. Total debt was 34.81 percent of total assets as on Dec. 31, 2016, compared with 32.25 percent on Jan. 02, 2016. Debt to equity ratio was at 0.84 as on Dec. 31, 2016, up from 0.74 as on Jan. 02, 2016. Interest coverage ratio deteriorated to 0.71 for the quarter from 1.05 for the same period last year.
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