On July 19, online biz wiz Google (NASDAQ:GOOG) released second-quarter earnings for the period ending June 30, 2007.

•  You may see this quarter called an earnings miss elsewhere, but keep in mind that the company issues no earnings guidance, so the miss would be against the average educated guess of analysts. The company still increased revenue by 57.7% to $3.9 billion year over year.

•  Costs ran away for the company a bit, as it went on a quarter-long hiring binge. There are now nearly 13% more Googlers on payroll than at the end of last quarter, so now CEO Eric Schmidt has promised to rein in the recruiting rampage somewhat.

•  Google is a two-star stock in CAPS. Fellow Internet giant and Motley Fool Stock Advisor recommendation Yahoo! (NASDAQ:YHOO) -- which reported earnings earlier this week -- also ropes in two out of five stars.

(Figures in millions, except per-share data)

Income Statement Highlights

Q2 2007

Q2 2006

Change

Sales

$3,872

$2,456

57.7%

Net Profit

$925

$721

28.3%

EPS

$2.93

$2.33

25.8%

Diluted Shares

315.5

310.0

1.8%

Get back to basics with the income statement.

Margin Checkup

Q2 2007

Q2 2006

Change*

Gross Margin

59.7%

59.7%

(0.0)

Operating Margin

28.5%

33.2%

(4.7)

Net Margin

23.9%

29.4%

(5.5)
*Expressed in percentage points.

Margins are the earnings engine.

Balance Sheet Highlights

Assets

Q2 2007

Q2 2006

Change

Cash + ST Invest.

$12,504

$9,822

27.3%

Accounts Rec.

$1,649

$885

86.3%

Liabilities

Q2 2007

Q2 2006

Change

Accounts Payable

$136

$179

(23.9%)

Long-Term Debt

$0

$0

N/A

The balance sheet reflects the company's health.

Cash Flow Highlights

Q2 2007

Q2 2006

Change

Cash From Ops.

$1,230

$841

46.3%

Capital Expenditures

$575

$699

(17.7%)

Free Cash Flow

$655

$142

362.5%

Owner Earnings

$573.3

$148

287.4%

Free cash flow is a Fool's best friend.

Related Foolishness:

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.

Yahoo! is a Stock Advisor pick. To see what else is cooking in Tom and David Gardner's kitchen, try a free 30-day trial today.

At the time of publication, Anders Bylund was a Google shareholder with a taste for more of that sweet G juice. All things considered, he's still a happy shareholder and can only shake a timid fist at our Foolish disclosure and trading policies for forcing his mouse pointer away from that "buy" button. Fool rules are here, whether you want them or not.