On Oct. 26, housewares producer extraordinaireNewell Rubbermaid (NYSE:NWL) released Q3 2006 earnings for the three-month period ended Sept. 30, 2006.

  • Improved gross margins were squandered further down the income statement. The ongoing restructuring program, dubbed Project Acceleration, clearly hasn't yet done much to improve operations.
  • Rubbermaid has a heavily leveraged balance sheet and deteriorating cash flows. That's not a comforting combination.
  • The company is paying back its long-term debt, however, which will ameliorate that last concern over time.

(Figures in millions, except per-share data)

Income Statement Highlights

Avg. Est.

Q3 2006

Q3 2005

Change

Sales

$1,550

$1,586.1

$1,436.6

10.4%

Net Profit*

--

$128.4

$116.5

10.2%

EPS*

$0.39

$0.46

$0.42

7.1%

Diluted Shares

283.9

275.0

3.2%
*Pro forma figures excluding discontinued operations and restructuring costs.

Get back to basics with a look at the income statement.

Margin Checkup

Q3 2006

Q3 2005

Change*

Gross Margin

33.74%

32.19%

1.55

Operating Margin

12.63%

12.17%

0.46

Net Margin

8.10%

8.11%

(0.01)
*Expressed in percentage points.

Margins are the earnings engine. See how they work.

Balance Sheet Highlights

Assets

Q3 2006

Q3 2005

Change

Cash + ST Invest.

$137.4

$485.5

(71.7%)

Accounts Rec.

$1,079.5

$958.0

12.7%

Inventory

$946.0

$876.4

7.9%


Liabilities

Q3 2006

Q3 2005

Change

Accounts Payable

$605.4

$484.9

24.9%

Long-Term Debt

$2,028.8

$2,377.2

(14.7%)


Learn the ways of the balance sheet.

Cash Flow Highlights

Q3 2006

Q3 2005

Change

Cash From Ops.

$312.2

$359.4

(13.1%)

Capital Expenditures

$36.9

$23.9

54.4%

Free Cash Flow

$275.3

$335.5

(17.9%)


Find out why Fools always follow the money.

Related Companies:

  • Jarden (NYSE:JAH)
  • Avery Dennison (NYSE:AVY)
  • Tupperware Brands (NYSE:TUP)

Related Foolishness:

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At the time of publication, Anders Bylund had no position in any stock mentioned. Fool rules are here .