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Secure Computing Stumbles: Fool by Numbers

Yesterday, Motley Fool Rule Breakers pick Secure Computing (Nasdaq: SCUR  ) released earnings for the third quarter ended Sept. 30, 2007.

  • Secure's conservative accounting understates its true earnings power. On a non-GAAP basis, which includes acquired deferred revenue and excludes intangibles, stock-based compensation, and other non-cash charges, Secure Computing earned $0.09 a share from $65.2 million in revenue.
  • Investors didn't take kindly to those numbers, though. Secure's total revenue all but scraped the bottom end of management's guidance and was well under what analysts had expected.
  • And while I remain a long-term bull, my inner bear can appreciate the sell-off. Sort of. Secure has lost several key executives in recent months, including its former head of sales. With peers Blue Coat (Nasdaq: BCSI  ) , CheckPoint (NYSE: CKP  ) , and Cisco (Nasdaq: CSCO  ) all vying with Secure for business, the battle for revenue growth will continue to be hard fought.
  • Nevertheless, CAPS investors like what they see. They give the stock five out of five stars. What's your take? Click here and let us know.

(Figures in thousands, except per-share data)

Income Statement Highlights

Q3 2007

Q3 2006






Net Profit








Diluted Shares




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

Margin Checkup

Q3 2007

Q3 2006


Gross Margin




Operating Margin




Net Margin




*Expressed in percentage points

Margins are the earnings engine.

Balance Sheet Highlights


Q3 2007

Q3 2006


Cash + ST Invest.




Accounts Rec.









Q3 2007

Q3 2006


Accounts Payable




Long-Term Debt




The balance sheet reflects the company's health.

Cash Flow Highlights

Nine Mos. 2007

Nine Mos. 2006


Cash From Ops.




Capital Expenditures




Free Cash Flow




Free cash flow is a Fool's best friend.

Related Foolishness:

  • Secure was a hot stock under $10 last month.
  • As with the last quarter, it's best these numbers not deceive you.
  • These are the numbers I'm talking about.

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