Akamai Still Ascending: Fool by Numbers

On Thursday, Motley Fool Rule Breakers pick AkamaiTechnologies (Nasdaq: AKAM  ) released third-quarter 2006 earnings for the period ended Sept. 30, 2006.

  • Net income appeared to take a huge hit, but the comparable drop was due to a $256 million one-time tax benefit issued during last year's Q3. As a result, Akamai has close to $300 million in credits that substitute for cash in paying taxes. It's likely they'll be available for several years, which should protect the firm's ample cash flow.

  • After accounting for the tax credit, amortization of intangibles, equity-based compensation, and other special items, Akamai's $0.24 in per-share earnings easily bested targets. Sales, too, came in above expectations.

  • It wasn't immediately clear whether Akamai altered full-year guidance. Earlier, management had said to expect per-share earnings of $0.83 on $415 million in 2006 sales.

(Figures in thousands, except per-share data)

Income Statement Highlights

Avg. Est.

Q3 2006

Q3 2005

Change

Sales

$108,790

$111,495

$75,713

47.3%

Net Profit

--

$14,019

$272,260

(94.9%)

EPS

$0.22

$0.08

$1.71

(95.3%)

Diluted Shares

--

177,063

160,362

10.4%



Get back to basics with a look at the income statement.

Margin Checkup

Q3 2006

Q3 2005

Change*

Gross Margin

77.59%

79.80%

(2.21)

Operating Margin

19.52%

24.83%

(5.31)

Net Margin

12.57%

359.59%

(347.02)

*Expressed in percentage points

Margins are the earnings engine. See how they work.

Balance Sheet Highlights

Assets

Q3 2006

Q3 2005

Change

Cash + ST Invest.

$276,654

$67,046

312.6%

Accounts Rec.

$67,375

$43,935

53.4%



Liabilities

Q3 2006

Q3 2005

Change

Accounts Payable

$73,322

$50,982

43.8%

Long-Term Debt

$200,000

$200,000

0%



Learn the ways of the balance sheet.

Cash Flow Checkup

Q3 2006

Q3 2005

Change

Cash From Ops.

$48,490

$19,499

148.7%

Capital Expenditures

$16,451

$8,531

92.8%

Free Cash Flow

$32,039

$10,968

192.1%



Find out why Fools always follow the money.

Related Companies:

  • Internap (Nasdaq: INAP  )
  • Limelight Networks
  • SAVVIS (Nasdaq: SVVS  )
  • VitalStream (Nasdaq: VSTH  )

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.

Akamai is one of three Rule Breakers selections to have tripled. Care to find out the names of the other two? Click here to get 30 days of free access to the service.

Fool contributor Tim Beyers owns shares of Akamai. You can find out which other stocks he owns by checking Tim's Fool profile. The Motley Fool's disclosure policy always adds up.


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