Tecumseh at War With Itself: Fool by Numbers

On Dec. 20, small-engine maker Tecumseh Products (Nasdaq: TECUA) released third-quarter 2006 earnings for the period ended Sept. 30.

• Revenues fell 4.5% from the previous year to $429.4 million, as currency fluctuations and higher commodity costs sunk performance.
• Operating margins plummeted 7 percentage points from a slight gain last year, as higher administrative costs and impairments from assets written down drained away profits.
• Without any significant storm and hurricane activity this year, generator sales plummeted 31% from the year-ago period.

(Figures in millions, except per-share data)

Income Statement Highlights

	Q3 2006	Q3 2005	Change
Sales	$429	$450	(4.6%)
Net Profit	($38)	($37)	N/A
EPS	($2.05)	($2.01)	N/A
Diluted Shares	18,480	18,480	0%

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

Margin Checkup

	Q3 2006	Q3 2005	Change*
Gross Margin	5.01%	8.91%	(3.90)
Operating Margin	(6.82%)	0.33%	(7.15)
Net Margin	(8.80%)	(8.27%)	(0.53)

*Expressed in percentage points.

Margins are the earnings engine. See how they work.

Balance Sheet Highlights

Assets	Q3 2006	Dec. 31, 2005	Change
Cash + ST Invest.	$59	$117	(49.7%)
Accounts Rec.	$247	$211	17.2%
Inventory	$369	$347	6.3%

Liabilities	Q3 2006	Dec. 31, 2005	Change
Accounts Payable	$215	$187	14.8%
Long-Term Debt	$266	$283	(6.1%)

Learn the ways of the balance sheet.

Cash Flow Highlights

	Q3 2006	Q3 2005	Change
Cash From Ops.	($36)	($20)	N/A
Capital Expenditures	$13	$29	(56.2%)
Free Cash Flow	($48)	($49)	N/A

Kudos to Tecumseh for providing a cash flow statement in its press release! Find out why Fools always follow the money.

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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.

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At the time of publication, Fool contributor Rich Duprey had no positions in any of the companies mentioned in the article. Fool rules are here.