On Dec. 18, smartphone designer Palm
- Palm shipped 11% more phones than in the year-ago period, but lower selling prices meant lower dollar sales.
- A $325 million investment from private equity fund Elevation Partners enabled Palm to enter into a recapitalization program of $396 million in fresh debt. Most of that went straight into a one-time dividend payout of $9 per share -- a $949 million expense in October.
- That combination of increased liabilities and big dividends is often used as a takeover defense, but who would buy the troubled gadget guru?
(Figures in millions, except per-share data)
Income Statement Highlights
Q2 2008 |
Q2 2007 |
Change |
|
---|---|---|---|
Sales |
$350 |
$393 |
(11.0%) |
Net Profit |
($8.8) |
$12.8 |
N/A |
EPS |
($0.09) |
$0.12 |
N/A |
Diluted Shares |
105.3 |
104.1 |
1.2% |
Get back to basics with the income statement.
Margin Checkup
Q2 2008 |
Q2 2007 |
Change* |
|
---|---|---|---|
Gross Margin |
29.7% |
35.4% |
(5.7) |
Operating Margin |
(12.2%) |
4.3% |
(16.5) |
Net Margin |
(2.5%) |
3.3% |
(5.8) |
Margins are the earnings engine.
Balance Sheet Highlights
Assets |
Q2 2008 |
Q2 2007 |
Change |
---|---|---|---|
Cash + ST Invest. |
$293 |
$518 |
(43.5%) |
Accounts Rec. |
$172 |
$247 |
(30.4%) |
Inventory |
$49.8 |
$38.9 |
28.1% |
Liabilities |
Q2 2008 |
Q2 2007 |
Change |
---|---|---|---|
Accounts Payable |
$168 |
$192 |
(12.8%) |
Long-Term Debt |
$396 |
$0 |
N/A |
The balance sheet reflects the company's health.
Cash Flow Highlights
Q2 2008 |
Q2 2007 |
Change |
|
---|---|---|---|
Cash From Ops. |
($13.5) |
$22.2 |
N/A |
Capital Expenditures |
$7.3 |
$8.3 |
(12.5%) |
Free Cash Flow |
($20.8) |
$13.9 |
N/A |
$3.8 |
$7.7 |
(51.2%) |
Free cash flow is a Fool's best friend.
Competitive Context
Market Cap |
Trailing P/E Ratio |
CAPS Rating (out of 5) |
|
---|---|---|---|
Apple |
$160,610 |
46.9 |
**** |
Nokia |
$140,840 |
15.2 |
***** |
Research In Motion |
$56,700 |
66.7 |
** |
Motorola |
$36,690 |
84.0 |
** |
Palm |
$571 |
14.6 |
* |
Keep your partners close and the competition in your vest pocket.
Related Foolishness:
- Palm's Sneak Attack
- The Sleeping Phone Giant Investors Ignore
- Apple Is So Awesome, the iPhone Doesn't Matter
- Foolish Fundamentals: The Balance Sheet
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