Amazon Looks Amazing: Fool by Numbers

On Jan. 30, online retail veteran Amazon.com (Nasdaq: AMZN  ) released earnings for the 2007 fiscal year -- a period ended Dec. 31, 2007.

  • If you're interested in the quarterly results, read our earnings take.
  • 2006 was an off year for Amazon, as earnings took a dive after two years at higher than $350 million. The company is back to its profitable and cash-generating ways.
  • Some of the recent growth comes from unique initiatives like the DRM-free digital music store and the warehouse-sharing Fulfillment By Amazon service. Adoption of Amazon Elastic Compute Cloud (EC2) and Amazon Simple Storage Service (S3) continues to grow. As an indicator of adoption, bandwidth utilized by these services in the fourth quarter 2007 was even greater than bandwidth utilized by all of Amazon.com's global websites combined.
  • Despite its virtues, Amazon remains a lowly two-star CAPS stock. Is that an unfair rating? Maybe it's too generous? Weigh in with one thumb and two cents right here.

(Figures in millions, except per-share data)

Income Statement Highlights

FY 2007

FY 2006

Change

Sales

$14,835

$10,711

38.5%

Net Profit

$476

$190

150.5%

EPS

$1.12

$0.45

148.9%

Diluted Shares

424

424

0%

Get back to basics with the income statement.

Margin Checkup

FY 2007

FY 2006

Change*

Gross Margin

22.6%

22.9%

(0.3)

Operating Margin

4.4%

3.6%

0.8

Net Margin

3.2%

1.8%

1.4

*Expressed in percentage points.

Margins are the earnings engine.

Balance Sheet Highlights

Assets

FY 2007

FY 2006

Change

Cash + ST Invest.

$3,112

$2,019

54.1%

Accounts Rec.

$705

$399

76.7%

Inventory

$1,200

$877

36.8%

Liabilities

FY 2007

FY 2006

Change

Accounts Payable

$2,795

$1,816

53.9%

Long-Term Debt

$1,282

$1,247

2.8%

The balance sheet reflects the company's health.

Cash Flow Highlights

FY 2007

FY 2006

Change

Cash From Ops.

$1,405

$702

100.1%

Capital Expenditures

$224

$216

3.7%

Free Cash Flow

$1,181

$486

143%

Owner Earnings

$498

$179

178.2%

Free cash flow is a Fool's best friend.

Competitive Context

Market Cap

Trailing P/E Ratio

CAPS Rating

Target (NYSE: TGT  )

$43,869

15.7

***

eBay (Nasdaq: EBAY  )

$35,354

106.2

***

Amazon

$30,702

64.5

**

Barnes & Noble (NYSE: BKS  )

$1,975

14.3

**

Overstock (Nasdaq: OSTK  )

$269.71

N/A

*

Using the latest reported numbers from Capital IQ. Keep your partners close and the competition in your vest pocket.

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