EMC + 2005 = Margins: Fool by Numbers

On Jan. 24, EMC (NYSE: EMC  ) released Q4 and FY 2005 earnings for the period ending Dec. 31, 2005.

  • Per-share earnings of $0.47 included more than $260 million in special charges relating to tax matters and workforce changes. Without them, EMC booked $0.53 per stub in 2005, equal to Street expectations.
  • The company made good on its promise to boost margins during the year. Find out why this is important.
  • Options expensing dragged down earnings by $0.13 during 2005, and management says it should continue at that rate in 2006.
  • Executives say 2006 should be another good year. Revenue and diluted earnings per share are both expected to rise by roughly 15%.

(Figures in thousands, except per-share data)

Income Statement Highlights

Avg. Est.

FY 2005

FY 2004

% Change

Sales

$9,640,000

$9,663,955

$8,229,488

+17.4%

Net Profit

--

$1,133,165

$871,189

+30.1%

EPS

$0.53

$0.47

$0.36

+30.6%



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

Margin Checkup

FY 2005

FY 2004

Change

Gross Margin

53.73%

51.21%

+2.52%

Op. Margin

15.32%

12.69%

+2.63%

Net Margin

11.73%

10.59%

+1.14%



Margins are the earnings engine. See how they work.

Balance Sheet Highlights

Assets

FY 2005

FY 2004

% Change

Cash+ ST Invest.

$3,937,865

$2,713,529

+45.1%

Inventory

$724,751

$514,065

+41.0%

Accounts Rec.

$1,405,564

$1,162,387

+20.9%



Liabilities

Long-Term Debt

$126,963

$128,456

-1.2%

Accounts Pay.

$583,756

$522,770

+11.7%



Cash Flow Highlights

FY 2005

FY 2004

% Change

Cash From Ops

$2,216,296

$2,102,295

+5.4%

Capital Expend.*

$1,284,808

$961.859

+33.6%

Free Cash Flow

$931,488

$1,140,436

-18.3%

*Adjusted to reflect the effect of cash acquisitions.

Find out why Fools always follow the money.

Related companies:

  • Dell (Nasdaq: DELL  )
  • Hewlett-Packard (NYSE: HPQ  )
  • Hitachi (NYSE: HIT  )
  • IBM (NYSE: IBM  )
  • Network Appliance (Nasdaq: NTAP  )
  • Sun Microsystems (Nasdaq: SUNW  )

For related Foolishness:

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 checkFool.comfor more of our in-depth discussion of what the numbers mean.

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Fool contributorTim Beyersdidn't own shares in any of the companies mentioned in this story at the time of publication. You can find out what is in his portfolio by checking Tim's Foolprofile. The Motley Fool has an ironcladdisclosure policy.


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