On Jan. 25, chip foundry Taiwan Semiconductor Manufacturing (NYSE:TSM) released fourth-quarter earnings for the 2006 fiscal year ending Dec. 31, 2006.
- This was a tough quarter any way you slice it, and once again the finger is pointed at sluggish demand for high-end cell phones. Entry-level phones are based on low-end chipsets, and semiconductor foundries like TSM make their big money when Texas Instruments (NYSE:TXN), Analog Devices (NYSE:ADI), and their peers need a hand with top-of-the-line manufacturing.
- The good news is that earnings are still positive, and both kinds of cash flows actually increased. $630 million of depreciation and amortization helped with that.
- The stock price dropped 6% on this news, but the company still has a four-star CAPS rating. Find out why your fellow Fools like TSM, and weigh in with your own take on this company -- or any company at all.
(Figures in millions, except per-share data; dollar values as reported by the company)
Income Statement Highlights
|
Q4 2006 |
Q4 2005 |
Change | |
|---|---|---|---|
|
Sales |
$2,283 |
$2,412 |
(5.4%) |
|
Net Profit |
$853 |
$1,032 |
(17.4%) |
|
EPS |
$0.17 |
$0.21 |
(19.0%) |
|
Diluted Shares |
5163.0 |
4938.6 |
4.5% |
Get back to basics with a look at the income statement.
Margin Checkup
|
Q4 2006 |
Q4 2005 |
Change* | |
|---|---|---|---|
|
Gross Margin |
46.0% |
58.4% |
(12.5) |
|
Operating Margin |
36.6% |
43.4% |
(6.9) |
|
Net Margin |
37.4% |
42.8% |
(5.4) |
Margins are the earnings engine. See how they work.
Management Effectiveness
|
Q4 2006 |
Q4 2005 |
Change* | |
|---|---|---|---|
|
Return On Assets |
19.5% |
26.8% |
(7.4) |
|
Return On Equity |
22.6% |
31.8% |
(9.2) |
See how management puts its financial tools to work.
Balance Sheet Highlights
|
Assets |
Q4 2006 |
Q4 2005 |
Change |
|---|---|---|---|
|
Cash + ST Invest. |
$5,985 |
$4,470 |
33.9% |
|
Accounts Rec. |
$969 |
$1,169 |
(17.1%) |
|
Inventory |
$657 |
$540 |
21.7% |
|
Liabilities |
Q4 2006 |
Q4 2005 |
Change |
|---|---|---|---|
|
Accounts Payable |
$631 |
$563 |
12.1% |
|
Long-Term Debt |
$383 |
$614 |
(37.6%) |
Learn the ways of the balance sheet.
Cash Flow Highlights
|
Q4 2006 |
Q4 2005 |
Change | |
|---|---|---|---|
|
Cash From Ops. |
$1,711 |
$1,525 |
12.2% |
|
Capital Expenditures |
$587 |
$415 |
41.6% |
|
Free Cash Flow |
$1,124 |
$1,110 |
1.2% |
|
$900 |
$1,186 |
(24.1%) |
Find out why Fools always follow the money.
Related Companies:
- Cypress Semiconductor (NYSE:CY)
- National Semiconductor (NYSE:NSM)
- ARM Holdings (Nsadaq: ARMHY)
- United Microelectronics (NYSE:UMC)
Related Foolishness:
ARM is a Motley Fool Stock Advisor recommendation. Find out more with a free 30-day trial subscription.
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 was a Taiwan Semiconductor Manufacturing shareholder but had no position in any other company mentioned. Fool rules are here.
