The Apple of My i: Fool by Numbers

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On July 25, iGadget maker Apple (Nasdaq: AAPL) released third-quarter earnings for the period ended June 30.

• It's another blowout quarter -- earnings came in a full 50% above management guidance, and revenues beat the official forecast by 6%.
• The desktop computer segment showed higher growth in revenues than in units over last year, so the average system sold was more expensive. The reverse is true for laptops, and only more so in iPod-land, where 21% more gadgets brought in just 5% higher revenue.
• There's no cash flow statement until Apple releases a full 10-Q statement, though management did say that the company saw "more than $1.2 billion" of net cash from operations.
• Speaking of cash, is that debt-free cash balance ridiculous, or what? Apple's net cash balance is in the same league as that of Google (Nasdaq: GOOG), and at this growth rate it might surpass Cisco (Nasdaq: CSCO) and even Microsoft (Nasdaq: MSFT) in a year or so. Yet this company has nowhere near the acquisition appetite of those other giants, and I'm wondering what Steve Jobs plans to do with all that moola. Surely not dividend payments, right?

(Figures in millions, except per-share data)

Income Statement Highlights

	Q3 2007	Q3 2006	Change
Sales	$5,410	$4,370	23.8%
Net Profit	$818	$472	73.3%
EPS	$0.92	$0.54	70.4%
Diluted Shares	890.7	876.4	1.6%

Get back to basics with the income statement.

Margin Checkup

	Q3 2007	Q3 2006	Change*
Gross Margin	36.9%	30.3%	6.6
Operating Margin	19.2%	13.0%	6.3
Net Margin	15.1%	10.8%	4.3

*Expressed in percentage points.

Margins are the earnings engine.

Balance Sheet Highlights

Assets	Q3 2007	Q3 2006	Change
Cash + ST Invest.	$13,767	$9,176	50.0%
Accounts Rec.	$1,410	$1,089	29.5%
Inventory	$251	$213	17.8%

Liabilities	Q3 2007	Q3 2006	Change
Accounts Payable	$3,660	$2,513	45.6%
Long-Term Debt	$0	$0	N/A

The balance sheet reflects the company's health.

Cash Flow Highlights

Free cash flow is a Fool's best friend, but once again, we're denied that statement by Apple. Boo! Hiss! Boo again!

Related Foolishness:

• Foolish Forecast: Cupertino Appletini
• My Name Is iPhone, and I'm Here to Destroy You
• Google: The Real iPhone Killer

Microsoft is an official Motley Fool Inside Value pick. Learn why Apple is unlikely to join that gang anytime soon with a free 30-day trial pass at your side.

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 was a Google shareholder but had no other position in any company mentioned. Fool rules are here.