China Mobile's Growing Empire: Fool by Numbers

On March 21, China Mobile (NYSE: CHL) released full-year 2006 earnings for the period ended Dec. 31.

• Sales growth of 21.5% and slight margin expansion led to a 23.4% increase in net income.
• The balance sheet firmed up with decreases in long-term liabilities, increased cash, and positive trends in accounts receivable and payable.
• The company's total subscriber base increased 22.1% to a mammoth 301 million users, which is nearly twice that of Telefonica (NYSE: TEF) and five times that of Verizon (NYSE: VZ).
• China Mobile is a five-star stock, the highest rating possible, in Motley Fool CAPS.

(Figures in millions, except per-share data. Figures based on an exchange rate of 7.77 Chinese yuan to 1 U.S. dollar.)

Income Statement Highlights

	FY 2006	FY 2005	Change
Sales	$38,000.9	$31,269.7	21.5%
Net Profit	$8,506.3	$6,894.8	23.4%
EPS	$0.42	$0.35	21.9%
Earnings per ADR	$2.12	$1.74	21.9%

Get back to basics with the income statement.

Margin Checkup

	FY 2006	FY 2005	Change*
Operating Margin	31.2%	30.3%	0.9
Net Margin	22.4%	22.1%	0.3

*Expressed in percentage points.

Margins are the earnings engine.

Balance Sheet Highlights

Assets	FY 2006	FY 2005	Change
Cash + ST Invest.	$9,156.4	$8,293.6	10.4%
Accounts Rec.	$920.3	$849.5	8.3%
Inventory	$386.9	$304.3	27.1%

Liabilities	FY 2006	FY 2005	Change
Accounts Payable	$7,364.5	$5,394.9	36.5%
Long-Term Debt	$4,319.6	$4,701.9	(8.1%)

The balance sheet reflects the company's health.

Cash Flow Highlights
China Mobile did not provide a statement of cash flows.

Find out why free cash flow is a Fool's best friend.

Related Foolishness:

• China Syndrome
• You're Missing Out on China
• Don't Hang Up on China Mobile

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.

Foolish editor Joe Magyer does not own any shares in the above mentioned company. The Fool has a disclosure policy.