Citizens' Rockin' Margins: Fool by Numbers

On Nov. 7, Motley Fool Income Investor selection Citizens Communications (NYSE: CZN  ) released third-quarter earnings for the period ended Sept. 30.

• Revenue was flat, as local, long distance, and equipment sales declined.
• But net profit increased by 46%, helped by an increase in operating margins.
• EPS increased by 60% because of net income growth and a reduction in diluted share count.
• Citizens carries a three-star rating in Motley Fool CAPS.

(Figures in millions, except per-share data)

Income Statement Highlights

	Q3 2006	Q3 2005	Change
Sales	$507.2	$501.2	1.2%
Net Profit*	$51.3	$35.2	45.8%
EPS*	$0.16	$0.10	60%
Diluted Shares	319.9	338.9	(5.6%)

*Net profit and EPS does not include income from discontinued operations.

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

Margin Checkup

	Q3 2006	Q3 2005	Change*
Gross Margin	91.6%	91.8%	(0.2)
Operating Margin	31.7%	27.3%	4.4
Net Margin	10.1%	7%	3.1

*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.	$417.1	$286.6	45.5%
Accounts Rec.	$231.0	$207.9	11.1%

Liabilities	Q3 2006	Q3 2005	Change
Accounts Payable	$346.2	$375.8	(7.9%)
Long-Term Debt	$3,947.7	$4,007.0	(1.5%)

Learn the ways of the balance sheet.

Cash Flow Highlights

	YTD 2006	YTD 2005	Change
Cash From Ops.	$573.8	$583.3	(1.6%)
Capital Expenditures	$163.4	$166.4	(1.8%)
Free Cash Flow	$410.4	$416.9	(1.6%)

Find out why Fools always follow the money.

Related Companies:

• CenturyTel (NYSE: CTL  )
• Time Warner Telecom (Nasdaq: TWTC  )
• Equinix (Nasdaq: EQIX  )
• AT&T (NYSE: T  )
• Verizon (NYSE: VZ  )

Related Foolishness:

• Stocks for Your Golden Years

Citizens Communication is a Motley Fool Income Investor recommendation. Take the newsletter for a30-day free trial.

Fool by Numbers is designed to give you the raw earnings information in a timely fashion, putting all the numbers you need in one easy-to-read place. But at The Motley Fool, we believe numbers tell only part of the story, so check Fool.com for more of our in-depth discussion of what the numbers mean. This data has been provided by Netscribes. To provide feedback on this article, please click on the "feedback" button below.