On July 30, UNIX System veteran Sun Microsystems (NASDAQ:SUNW) released fourth-quarter earnings for the period ended June 30.
- Management had hoped to reach a 4% operating margin this quarter, and floated past that mark with ease.
- The overall margin uptrend continued to roll on, except when it came to the cash flow take. Large investments in infrastructure severely cut down the free cash flow, but that's not always such a bad thing.
(Figures in millions, except per-share data)
Income Statement Highlights
|
Q4 2007 |
Q4 2006 |
Change | |
|---|---|---|---|
|
Sales |
$3,835 |
$3,828 |
0.2% |
|
Net Profit |
$329 |
($301) |
N/A |
|
EPS |
$0.09 |
($0.09) |
N/A |
|
Diluted Shares |
3,632 |
3,475 |
4.5% |
Get back to basics with the income statement.
Margin Checkup
|
Q4 2007 |
Q4 2006 |
Change* | |
|---|---|---|---|
|
Gross Margin |
47.3% |
42.8% |
4.4 |
|
Operating Margin |
8.5% |
(8.8%) |
17.2 |
|
Net Margin |
8.6% |
(7.9%) |
16.4 |
Margins are the earnings engine.
Balance Sheet Highlights
|
Assets |
Q4 2007 |
Q4 2006 |
Change |
|---|---|---|---|
|
Cash + ST Invest. |
$4,582 |
$4,065 |
12.7% |
|
Accounts Rec. |
$2,964 |
$2,702 |
9.7% |
|
Inventory |
$524 |
$540 |
(3.0%) |
|
Liabilities |
Q4 2007 |
Q4 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
|
Q4 2007 |
Q4 2006 |
Change | |
|---|---|---|---|
|
Cash From Ops. |
$473 |
$410 |
15.4% |
|
Capital Expenditures |
$324 |
$142 |
128.2% |
|
Free Cash Flow |
$149 |
$268 |
(44.4%) |
|
$223 |
$76 |
193.4% |
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.
At the time of publication, Anders Bylund had no position in any company mentioned. Fool rules are here.
