Measuring the Years by Sun Dial: Fool by Numbers

On July 30, computing powerhouse Sun Microsystems (Nasdaq: SUNW  ) released earnings for the 2007 fiscal year ending June 30.

  • It looks like the turnaround plans are working for Sun. This is the first GAAP-profitable fiscal year since 2001.
  • Sales growth has slowed down, but profits are up -- a combination that often shows a company that isn't interested in chasing sales at any price when it can pursue higher-quality revenue instead.
  • Expect that share dilution to turn around soon. There's a freshly board-approved $3 billion authorization for share repurchases on the table.

(Figures in millions, except per-share data)

Income Statement Highlights

FY 2007

FY 2006

Change

Sales

$13,873

$13,068

6.2%

Net Profit

$473

($864)

N/A

EPS

$0.13

($0.25)

N/A

Diluted Shares

3,606

3,437

4.9%

Get back to basics with the income statement.

Margin Checkup

FY 2007

FY 2006

Change*

Gross Margin

45.2%

43.1%

2.1

Operating Margin

2.2%

(6.7%)

8.9

Net Margin

3.4%

(6.6%)

10.0

*Expressed in percentage points.

Margins are the earnings engine.

Balance Sheet Highlights

Assets

FY 2007

FY 2006

Change

Cash + ST Invest.

$4,582

$4,065

12.7%

Accounts Rec.

$2,964

$2,702

9.7%

Inventory

$524

$540

(3%)

Liabilities

FY 2007

FY 2006

Change

Accounts Payable

$1,428

$1,446

(1.2%)

Long-Term Debt

$1,265

$1,078

17.3%

The balance sheet reflects the company's health.

Cash Flow Highlights

FY 2007

FY 2006

Change

Cash From Ops.

$958

$640

49.7%

Capital Expenditures

$488

$388

25.8%

Free Cash Flow

$470

$252

86.5%

Owner Earnings

$912

$67

1,261.2%

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.

At the time of publication, Anders Bylund had no position in any company mentioned. Fool rules are here.


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