On May 16, Sony
- Read our Foolish Quick Take on whether Sony is poised to make a comeback.
- Revenue increased by 12.3% to $17.7 million, thanks to the performance of the electronics and pictures segments; strong LCD sales and movie hits like Casino Royale and The Pursuit of Happyness helped offset the lackluster performance of Sony's PlayStation 3.
- While sales in the gaming segment rose 85% year over year because of the release of the PS3, the company reported significant operating losses. Intense game console competition from Nintendo's Wii and Microsoft's
(NASDAQ:MSFT) Xbox led to lower prices -- which didn't offset production costs. - Although sales increased, the company is still in the red, with flat negative earnings per share. Gross margin and operating margin dropped significantly, but net margin improved slightly.
- It's no secret that many Foolish contributors are bearish on the stock. Our Motley Fool CAPS community shares the same sentiment, giving Sony the lowest ranking -- one star. Meanwhile, other Japanese competitors such as Nintendo and Canon
(NYSE:CAJ) sport top five-star rankings.
(Figures in millions, except per-share data.)
Income Statement Highlights
|
Q4 2006 |
Q4 2005 |
Change |
|
|---|---|---|---|
|
Sales |
$17,709 |
$15,773 |
12.3% |
|
Net Profit |
($573) |
($569) |
N/A |
|
EPS |
($0.57) |
($0.57) |
N/A |
|
Diluted Shares |
1,001.8 |
1,000.8 |
0.1% |
Get back to basics with the income statement.
Margin Checkup
|
Q4 2006 |
Q4 2005 |
Change* |
|
|---|---|---|---|
|
Gross Margin |
24.8% |
29.5% |
(4.7) |
|
Operating Margin |
(5.4%) |
(3.4%) |
(2.1) |
|
Net Margin |
(3.2%) |
(3.6%) |
0.4 |
Margins are the earnings engine.
Balance Sheet Highlights
|
Assets |
Q4 2006 |
Q4 2005 |
Change |
|---|---|---|---|
|
Cash + ST Invest. |
$10,960 |
$10,598 |
3.4% |
|
Accounts Rec. |
$12,631 |
$9,189 |
37.5% |
|
Inventory |
$7,974 |
$6,878 |
15.9% |
|
Liabilities |
Q4 2006 |
Q4 2005 |
Change |
|---|---|---|---|
|
Accounts Payable |
$18,207 |
$14,259 |
27.7% |
|
Long-Term Debt |
$8,483 |
$6,538 |
29.7% |
The balance sheet reflects the company's health.
Cash Flow Highlights
|
FY 2006 |
FY 2005 |
Change |
|
|---|---|---|---|
|
Cash From Ops. |
$4,754 |
$3,418 |
39.1% |
|
Capital Expenditures |
$4,470 |
$3,953 |
13.1% |
|
Free Cash Flow |
$284 |
($535) |
N/A |
Free cash flow is a Fool's best friend.
Related Foolishness:
- Quick Take: Is Sony Really Turning the Corner?
- Before the Call: Sayonara, Sony
- Sony PS3 Gets Played
- Sony Blunders With DRM Again
Nintendo is a Stock Advisor pick, while Microsoft is an Inside Value recommendation. Try a free 30-day trial of either newsletter to level up your portfolio.
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. This data has been provided by Netscribes. To provide feedback on this article, please click on the "feedback" button below.
