"Step up, step up, step up the sky is open-armed
When the light is mine, I felt gravity pull onto my eyes
Holding my head straight (looking down).
This is the easiest task I've ever had to do..."

-- "Feeling Gravity's Pull," R.E.M.

It's National Poetry Month, and rock lyrics can be poetry, too. On March 11, BlackBerry maker Research In Motion (NASDAQ:RIMM) released fourth-quarter 2007 earnings for the period ended March 3. It looks like the company is having no trouble fighting gravity today.

  • These results are preliminary, pending completion of RIM's review of past options granting procedures. Canadians aren't above joining the ranks of sloppy and/or shady accounting practitioners such as Apple (NASDAQ:AAPL) or Cirrus Logic (NASDAQ:CRUS), it seems.


  • The year-ago results suffered from a $162.5 million legal charge as the company settled a lawsuit with privately held patent holding company NTP. Excluding those charges and related tax effects, RIM would have seen about $0.65 of earnings per share in the year-ago period.


  • There's no denying RIM's impressive revenue growth, nor its strengthening balance sheet. But RIM could use every advantage it can get, as it faces larger and better-equipped competitors like Nokia (NYSE:NOK), Palm (NASDAQ:PALM), and Motorola (NYSE:MOT), all intent on stealing RIM's traditional business-oriented customers.

(Figures in millions, except per-share data)

Income Statement Highlights

Q4 2007

Q4 2006

Change

Sales

$930.4

$561.2

65.8%

Net Profit

$187.9

$18.4

923.9%

EPS

$0.99

$0.10

890%

Diluted Shares

190.3

191.5

(0.7%)

Get back to basics with the income statement.

Margin Checkup

Q4 2007

Q4 2006

Change*

Gross Margin

53.5%

54.3%

(0.8)

Operating Margin

26%

(1.7%)

27.6

Net Margin

20.2%

3.3%

16.9

*Expressed in percentage points.

Margins are the earnings engine.

Balance Sheet Highlights

Assets

Q4 2007

Q4 2006

Change

Cash + ST Invest.

$987.2

$635.1

55.4%

Accounts Rec.

$572.6

$315.3

81.6%

Inventory

$255.9

$134.5

90.2%

Liabilities

Q4 2007

Q4 2006

Change

Accounts Payable

$130.3

$95.0

37.2%

Long-Term Debt

$6.3

$6.9

(7.4%)

The balance sheet reflects the company's health.

Cash Flow Highlights

Q4 2007

Q4 2006

Change

Cash From Ops.

$174.4

($307.9)

N/A

Capital Expenditures

$77.2

$48.1

60.4%

Free Cash Flow

$97.2

($356.0)

N/A

Owner Earnings

$145.0

$157.9

(8.2%)

Free cash flow is a Fool's best friend.

Related Foolishness:

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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, Fool contributor Anders Bylund had no position in any company mentioned. He thought that R.E.M. would go well together with RIM. Fool rules are here.