aQuantive at Its End: Fool by Numbers

On Wednesday, former Motley Fool Rule Breakers pick aQuantive (Nasdaq: AQNT  ) released earnings for the second quarter ended June 30.

  • Excluding $6.2 million (after tax) in charges relating to its acquisition by Microsoft (Nasdaq: MSFT  ) , aQuantive improved its bottom line by roughly 28%.
  • Revenue growth was led by aQuantive's digital performance media group, which realized an 81% gain on the top line.
  • Free cash flow ran negative during the quarter thanks to the aforementioned Microsoft charges and a massive increase in payables, presumably designed to clear the books before Mr. Softy takes command.
  • Nevertheless, the professional and amateur stock pickers following aQuantive in our Motley Fool CAPS investor-intelligence database give the stock four out of five stars.

(Figures in thousands, except per-share data)

Income Statement Highlights

Q2 2007

Q2 2006

Change

Sales

$155,975

$105,629

47.7%

Net Profit

$9,613

$12,337

(22.1%)

EPS

$0.11

$0.15

(26.7%)

Diluted Shares

 90,844

 87,448

3.9%

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

Margin Checkup

Q2 2007

Q2 2006

Change*

Gross Margin

84.10%

85.56%

(1.46)

Operating Margin

8.38%

16.92%

(8.54)

Net Margin

6.16%

11.68%

(5.52)

*Expressed in percentage points.

Margins are the earnings engine.

Balance Sheet Highlights

Assets

Q2 2007

Q2 2006

Change

Cash + ST Invest.

$309,697

$307,612

0.7%

Accounts Rec.

$271,093

$183,104

48.1%

Liabilities

Q2 2007

Q2 2006

Change

Accounts Payable

$164,848

$99,136

66.3%

Long-Term Debt

$79,715

$80,000

(0.4%)

The balance sheet reflects the company's health.

Cash Flow Highlights

Q2 2007

Q2 2006

Change

Cash From Ops.

$5,708

$35,855

(84.1%)

Capital Expenditures

$18,289

$10,988

66.4%

Free Cash Flow

($12,581)

$24,867

N/A

Free cash flow is a Fool's best friend.

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Microsoft is an Inside Value pick.

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.

Fool contributor Tim Beyers owned shares of aQuantive at the time of publication. Find Tim's portfolio here and his latest blog commentary here. The Motley Fool's disclosure policy used to run numbers down by the Jersey shore. Today, it runs circles around Wall Street.

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