On Thursday, soon-to-be-taken-private Freescale Semiconductor (NYSE:FSL) released Q3 2006 earnings for the period ended Sept. 29.

  • With results like these, it's easy to see why private equity group Blackstone and its allies might want Freescale under their wings. Sales and earnings growth like this doesn't grow on trees.
  • The margins point to pricing power coupled with strict execution, and the gross gains amplify this farther down the ladder.
  • A company that's cutting debt by a third and doubling available cash, all the while buying back more shares than it issues, is good in my book. Too bad it probably won't be around as an investment option much longer.

(Figures in millions, except per-share data)

Income Statement Highlights

Avg. Est.

Q3 2006

Q3 2005

Change

Sales

$1,578

$1,619

$1,450

11.7%

Net Profit

--

$257

$164

56.7%

EPS

$0.52

$0.61

$0.38

60.5%

Diluted Shares

424

428

(0.9%)


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

Margin Checkup

Q3 2006

Q3 2005

Change*

Gross Margin

46.08%

42.9%

3.18

Operating Margin

16.37%

10.48%

5.89

Net Margin

15.87%

11.31%

4.56
*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.

$2,965.0

$1,485.0

99.7%

Accounts Rec.

$711.0

$710.0

0.1%

Inventory

$756.0

$679.0

11.3%

Liabilities

Q3 2006

Q3 2005

Change

Accounts Payable

$577.0

$1,014.0

(43.1%)

Long-Term Debt

$832.0

$1,251.0

(33.5%)


Learn the ways of the balance sheet.

Cash Flow Highlights

The company denied us a cash flow statement this time. Rascals!

Find out why Fools always follow the money.

Related companies:

  • Intel (NASDAQ:INTC)
  • Texas Instruments (NYSE:TXN)
  • Fairchild Semiconductor (NYSE:FCS)
  • Advanced Micro Devices (NYSE:AMD)
  • Koninklijke Philips (NYSE:PHG)
  • Mitsui (NASDAQ:MITSY)

Related Foolishness:

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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.

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