On Feb. 6, beauty-products firm Avon Products (NYSE:AVP) released fourth-quarter and year-end results for the period ended Dec. 31. Here are the quick-and-dirty details for the quarter.

  • Total sales grew 9.4%, ahead of company and analyst expectations.
  • Diluted earnings grew only 2.5%, but also topped analyst projections, helped by fewer diluted shares outstanding.
  • Operating profit fell, contributing to a decrease in the operating margin 1.6 percentage points. This was attributed to increased advertising expense and costs related to Avon's restructuring moves.
  • Long-term debt jumped 52.7%, thanks primarily to share buybacks.

(Figures in millions, except per-share data)

Income Statement Highlights

Q4 2006

Q4 2005

Change

Sales

$2,623

$2,398

9.4%

Net Profit

$184

$183

0.5%

EPS

$0.41

$0.40

2.5%

Diluted Shares

445

457

(2.4%)

*Three months ended Dec. 31, 2006 and 2005

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

Margin Checkup

Q4 2006

Q4 2005

Change*

Gross Margin

59.4%

59.1%

0.3

Operating Margin

10.8%

12.4%

(1.6)

Net Margin

7.0%

7.6%

(0.6)

*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.

$1,199

$1,059

13.2%

Accounts Rec.

$700

$634

10.5%

Inventory

$900

$802

12.3%



Liabilities

Q4 2006

Q4 2005

Change

Accounts Payable

$656

$538

21.9%

Long-Term Debt

$1,171

$767

52.7%



Learn the ways of the balance sheet.

Cash Flow Highlights

Q4 2006

Q4 2005

Change

Cash From Ops.

$796

$896

(11.1%)

Capital Expenditures

$158

$177

(10.3%)

Free Cash Flow

$638

$719

(11.3%)

*12 months ended Dec. 31, 2006 and 2005

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Comparable companies:

  • Alberto Culver (NYSE:ACV)
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  • Elizabeth Arden (NASDAQ:RDEN)

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Fool contributor Ryan Fuhrmann has no financial interest in any company mentioned. Feel free to email him with feedback or to discuss any companies mentioned further. The Fool has an ironclad disclosure policy.