The morning of Jan. 23, data-storage powerhouse EMC (NYSE:EMC) released fourth-quarter earnings for the 2006 fiscal year ending Dec. 31, 2006.
- EMC has been hungry for a while, acquiring 22 companies over the past three years. It's spent a total of $2.3 billion on firms like data-security expert RSA and data-protection minnow Kashya. But management says the spending spree is over, and the focus for 2007 is organic growth.
- The company took on a hefty debt load to fuel this binge; interest payments have ballooned from about $2 million to $25 million per quarter.
- This is a mere two-star Motley Fool CAPS stock today. Is that a fair assessment? Unfair? Drop by and let us know what you think.
(Figures in millions, except per-share data)
Income Statement Highlights
|
Q4 2006 |
Q4 2005 |
Change | |
|---|---|---|---|
|
Sales |
$3,214.6 |
$2,710.3 |
18.6% |
|
Net Profit |
$388.8 |
$148.3 |
162.2% |
|
EPS |
$0.18 |
$0.06 |
200.0% |
|
Diluted Shares |
2164.5 |
2411.9 |
(10.3%) |
Get back to basics with a look at the income statement.
Margin Checkup
|
Q4 2006 |
Q4 2005 |
Change* | |
|---|---|---|---|
|
Gross Margin |
54.1% |
54.8% |
(0.7) |
|
Operating Margin |
9.3% |
15.5% |
(6.2) |
|
Net Margin |
12.1% |
5.5% |
6.6 |
Margins are the earnings engine. See how they work.
Management Effectiveness
|
Q4 2006 |
Q4 2005 |
Change* | |
|---|---|---|---|
|
Return On Assets |
9.5% |
3.9% |
5.6 |
|
Return On Equity |
16.4% |
5.4% |
11.0 |
See how management puts its financial tools to work.
Balance Sheet Highlights
|
Assets |
Q4 2006 |
Q4 2005 |
Change |
|---|---|---|---|
|
Cash + ST Invest. |
$3,350.0 |
$3,937.9 |
(14.9%) |
|
Accounts Rec. |
$1,692.2 |
$1,405.6 |
20.4% |
|
Inventory |
$834.8 |
$724.8 |
15.2% |
|
Liabilities |
Q4 2006 |
Q4 2005 |
Change |
|---|---|---|---|
|
Accounts Payable |
$680.3 |
$583.8 |
16.5% |
|
Long-Term Debt |
$3,450.0 |
$127.0 |
2617.3% |
Learn the ways of the balance sheet.
Cash Flow Highlights
|
Trailing 12 Months |
Q4 2006 |
Q4 2005 |
Change |
|---|---|---|---|
|
Cash From Ops. |
$2,140.4 |
$2,216.3 |
(3.4%) |
|
Capital Expenditures |
$718.1 |
$601.1 |
19.5% |
|
Free Cash Flow |
$1,422.3 |
$1,615.2 |
(11.9%) |
Find out why Fools always follow the money.
Cash Conversion Checkup
|
Q4 2006 |
Q4 2005 |
Change | |
|---|---|---|---|
|
Days in Inventory |
47.0 |
49.6 |
(2.6) |
|
Days in Receivables |
39.7 |
39.4 |
0.3 |
|
Days Payables Outstanding |
38.7 |
37.2 |
1.5 |
|
Cash Conversion Cycle |
48.0 |
51.8 |
(3.8) |
Read up on cash conversion metrics.
Related Companies:
- Oracle (NASDAQ:ORCL)
- Hewlett-Packard (NYSE:HPQ)
- Sun Microsystems (NASDAQ:SUNW)
- CA (NYSE:CA)
- BMC Software (NYSE:BMC)
- Dot Hill Systems (NASDAQ:HILL)
Related Foolishness:
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At the time of publication, Anders Bylund had no position in any company mentioned. Fool rules are here.
