By
Anders Bylund
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More Articles
December 19, 2007
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On Dec. 18, smartphone designer Palm (Nasdaq: PALM ) released second-quarter 2008 earnings for the period ended Nov. 30.
- 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
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$350
|
$393
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(11.0%)
|
|
Net Profit
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($8.8)
|
$12.8
|
N/A
|
|
EPS
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($0.09)
|
$0.12
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N/A
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|
Diluted Shares
|
105.3
|
104.1
|
1.2%
|
Get back to basics with the income statement.
Margin Checkup
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Q2 2008
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Q2 2007
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Change*
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Gross
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29.7%
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35.4%
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(5.7)
|
|
Operating
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(12.2%)
|
4.3%
|
(16.5)
|
|
Net
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(2.5%)
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3.3%
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(5.8)
|
*Expressed in percentage points.
Margins are the earnings engine.
Balance Sheet Highlights
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Assets
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Q2 2008
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Q2 2007
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Change
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|
Cash + ST Invest.
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$293
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$518
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(43.5%)
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|
Accounts Rec.
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$172
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$247
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(30.4%)
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Inventory
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$49.8
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$38.9
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28.1%
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|
Liabilities
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Q2 2008
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Q2 2007
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Change
|
|
Accounts Payable
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$168
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$192
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(12.8%)
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|
Long-Term Debt
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$396
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$0
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N/A
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The balance sheet reflects the company's health.
Cash Flow Highlights
|
Q2 2008
|
Q2 2007
|
Change
|
|
Cash From Ops.
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($13.5)
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$22.2
|
N/A
|
|
Capital Expenditures
|
$7.3
|
$8.3
|
(12.5%)
|
|
Free Cash Flow
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($20.8)
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$13.9
|
N/A
|
|
Owner Earnings
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$3.8
|
$7.7
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(51.2%)
|
Free cash flow is a Fool's best friend.
Competitive Context
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Market Cap
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Trailing
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CAPS Rating (out of 5)
|
|
Apple (NASDAQ:AAPL)
|
$160,610
|
46.9
|
****
|
|
Nokia (:NOK)
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$140,840
|
15.2
|
*****
|
|
Research In Motion (NASDAQ:RIMM)
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$56,700
|
66.7
|
**
|
|
Motorola (NYSE:MOT)
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$36,690
|
84.0
|
**
|
|
Palm
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$571
|
14.6
|
*
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Source: Capital IQ.
Keep your partners close and the competition in your vest pocket.
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