On Feb. 6, beauty-products firm Avon Products
- 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%) |
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) |
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%) |
Find out why Fools always follow the money.
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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.