Palm Sweats: Fool by Numbers

On June 28, smartphone and PDA specialist Palm (Nasdaq: PALM) released fourth-quarter earnings for the period ended May 31.

• At least the cash flow picture has improved for this Motley Fool Stock Advisor recommendation. Both cash from operations and free cash flow flipped from negative in last year's Q4 to positive this time around.
• If you're keeping track, revenue for the current first quarter is expected to be in the $355 million to $365 million range, with EPS somewhere close to breakeven.
• Read Rich Smith's semi-optimistic view of today's earnings right here.
• In Motley Fool CAPS, the stock receives a lowly one-star rating.

(Figures in millions, except per-share data.)

Income Statement Highlights

	Q4 2007	Q4 2006	Change
Sales	$401.3	$403.1	(0.5%)
Net Profit	$15.4	$27.2	(43.5%)
EPS	$0.15	$0.25	(40%)
Diluted Shares	105.2	108.2	(2.8%)

Get back to basics with the income statement.

Margin Checkup

	Q4 2007	Q4 2006	Change*
Gross Margin	38.2%	37.2%	1.1
Operating Margin	4.3%	5.8%	(1.6)
Net Margin	3.8%	6.7%	(2.9)

*Expressed in percentage points.

Margins are the earnings engine.

Balance Sheet Highlights

Assets	Q4 2007	Q4 2006	Change
Cash + ST Invest.	$546.7	$518.9	5.4%
Accounts Rec.	$204.3	$204.3	(0%)
Inventory	$39.2	$58.0	(32.5%)

Liabilities	Q4 2007	Q4 2006	Change
Accounts Payable	$196.2	$184.5	6.3%
Long-Term Debt	$0.0	$0.0	N/A

The balance sheet reflects the company's health.

Cash Flow Highlights

	Q4 2007	Q4 2006	Change
Cash From Ops.	$42.9	($28.1)	N/A
Capital Expenditures	$5.0	$3.3	54.3%
Free Cash Flow	$37.9	($31.3)	N/A

Free cash flow is a Fool's best friend.

Related Foolishness:

• Treo Tries, Wi-Fi Dies
• Foolish Forecast: Palm Gets the Brush-Off
• Fool Video: Invest in Palm, Invest in the Next iPod?

Palm is a Stock Advisor pick.

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.