Virtusa Corporation (VRTU) has reported 14.85 percent fall in profit for the quarter ended Mar. 31, 2017. The company has earned $10.46 million, or $0.34 a share in the quarter, compared with $12.29 million, or $0.41 a share for the same period last year. On the other hand, adjusted net income for the quarter stood at $12.90 million, or $0.43 a share compared with $16.62 million or $0.55 a share, a year ago. Revenue during the quarter surged 31.49 percent to $225.96 million from $171.85 million in the previous year period. Gross margin for the quarter contracted 598 basis points over the previous year period to 29.11 percent. Total expenses were 95.48 percent of quarterly revenues, down from 96.79 percent for the same period last year. This has led to an improvement of 131 basis points in operating margin to 4.52 percent.
Operating income for the quarter was $10.22 million, compared with $5.52 million in the previous year period.
However, the adjusted operating income for the quarter stood at $18.75 million compared to $21.82 million in the prior year period. At the same time, adjusted operating margin contracted 440 basis points in the quarter to 8.30 percent from 12.70 percent in the last year period.
Kris Canekeratne, Virtusa’s Chairman and Chief executive officer, stated, “We made excellent progress against our FY 2017 strategic goals. Most notably, we are pleased with the integration of Polaris and our ability to greatly expand our addressable market in BFSI, Communications & Technology and Media & Information. We are very pleased with the number of leading enterprises that rely on Virtusa for their most strategic end-to-end digital transformation programs. Looking to fiscal 2018, we will intensify our digital offerings and strengthen our leadership position in this rapidly growing area. We are delighted that Vikram S. Pandit joined our board and the strategic value he brings. Additionally, we are enthusiastic about leveraging Orogen's and Atairos’ network to advance our growth strategy by bringing our digital offerings to enterprises in their network.”
For the first-quarter 2018, Virtusa Corporation expects revenue to be in the range of $222.50 million to $227.50 million and its diluted earnings per share to be in the range of $0.07 to $0.13 and adjusted diluted earnings per share to be in the range of $0.24 to $0.30.
For fiscal year 2018, Virtusa Corporation expects revenue to be in the range of $920 million to $950 million and its diluted earnings per share to be in the range of $0.81 to $1.07 and adjusted diluted earnings per share to be in the range of $1.42 to $1.66.
Operating cash flow drops significantly
Virtusa Corporation has generated cash of $22.23 million from operating activities during the year, down 51.56 percent or $23.66 million, when compared with the last year. Cash flow from investing activities was $67.02 million from investing activities during the year as against cash outgo of $217.94 million in the last year. It has incurred net capital expenditure of $12.71 million on net basis during the year, down 5.16 percent or $0.69 million from year ago.
The company has spent $91 million cash to carry out financing activities during the year as against cash inflow of $197.37 million in the last year period.
Cash and cash equivalents stood at $144.91 million as on Mar. 31, 2017, down 2.74 percent or $4.08 million from $148.99 million on Mar. 31, 2016.
Debt comes down marginally
Virtusa Corporation has recorded a decline in total debt over the last one year. It stood at $185.59 million as on Mar. 31, 2017, down 4.59 percent or $8.92 million from $194.51 million on Mar. 31, 2016.
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