Palm Sweats Earnings in Q4: Fool by Numbers

On June 29, 2006, Motley Fool Stock Advisor selection Palm (Nasdaq: PALM  ) released Q4 2006 earnings for the period ended May 31, 2006.

  • Sales and per-share earnings easily beat Street estimates, but that wasn't enough to please investors. Palm shares are trading roughly 11% lower today.
  • Blame guidance. Management said it expects $380 million to $385 million in first-quarter sales and $0.18 to $0.19 in per-share earnings. Analysts, however, were projecting an average of $0.22 a stub on $413.4 million in revenue. Ouch.

(Figures in thousands, except per-share data)

Income Statement Highlights

Avg. Est.

Q4 2006

Q4 2005

% Change

Sales

$401,800

$403,136

$335,820

20

Net Profit*

--

$30,619

$19,216

59.3

EPS*

$0.23

$0.29

$0.19

52.6

*Adjusted for restructuring expenses, stock-based compensation and other charges

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

Margin Checkup

Q4 2006

Q4 2005

Change*

Gross Margin

37.17%

30.21%

6.96

Op. Margin

5.81%

5.64%

0.17

Net Margin

6.74%

5.28%

1.46

*Expressed in percentage points.

Margins are the earnings engine. See how they work.

Balance Sheet Highlights

Assets

Q4 2006

Q4 2005

% Change

Cash + ST Invest.

$518,894

$362,699

43.1

Inventory

$58,010

$35,544

63.2

Accounts Rec.

$204,337

$140,162

45.8



Liabilities

Q4 2006

Q4 2005

% Change

Total Debt

$35,000

$35,000

0

Accounts Pay.

$184,501

$135,720

35.9



Learn the ways of the balance sheet.

Cash Flow Checkup

Q4 2006

Q4 2005

% Change

Cash From Ops

($28,809)

$36,492

N/A

Capital Expend.

$3,258

$5,967

(45.4)

Free Cash Flow

($32,067)

$30,525

N/A



Find out why Fools always follow the money.

Related Companies:

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  • Motorola (NYSE: MOT  )
  • Nokia (NYSE: NOK  )
  • Research In Motion (Nasdaq: RIMM  )

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 check Fool.com for more of our in-depth discussion of what the numbers mean.

Intel and Microsoft areMotley Fool Inside Valuerecommendations. Try the service free for 30 days.

Fool contributor Tim Beyers owns shares of Nokia. You can find out what else is in his portfolio by checking Tim's Fool profile. The Motley Fool has an ironclad disclosure policy.


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