Rofin-Sinar Roars

And that's a wrap.

Laser-maker and Motley Fool Hidden Gems recommendation Rofin-Sinar (Nasdaq: RSTI) closed the books on fiscal 2007 this morning with an earnings report that's already sent its stock roaring 7% higher.

I'll leave it to the myopic mainstream media to apprise you of the fourth-quarter results in particular. Meanwhile, because we prefer to take a long-term view here at the Fool, I'll be focusing on the numbers for the full fiscal year. Namely:

• Sales for the year increased 14% compared to fiscal 2006, to $479.7 million.
• Net profits grew 11% to $55.3 million, as profits per diluted share lagged that a little, rising 10% to $3.48.

As investors, we're ordinarily pleased when profits grow faster than sales, which suggests that profit margins are widening. Conversely, a trend such as the one shown above -- with profits growing slower than sales -- must be viewed as a bad thing. However, reverting ever-so-briefly to the short-term view, it's worth pointing out that the year suffered from subpar performance in the second and third quarters. Q4, in contrast, showed profits growing much faster than sales for a change -- so this is a good thing.

But what about the other thing?
It's not, however, the thing I want to talk about today. Rather, I want to take Rofin-Sinar to task for engaging in the following corporate double-talk: "We are pleased to announce that the Board of Directors has approved a share split and share buyback program with the objective of increasing the Company's share liquidity, broadening our shareholder base and rewarding our existing shareholders."

Am I the only Fool who thinks this statement is total nonsense? First off, share splits are total nonevents. I don't care if it's a Motley Fool recommendation like GameStop or Starbucks that's doing the splitting, a personal favorite like Lifeway, or just an everyday company like Corinthian Colleges. Stock splits don't affect sales, profits, or the value of the company doing the selling and profiting.

To quote a recent shareholder communication from another of my favorite companies, Morningstar: "We don't currently have any plans for a stock split. Although a lower stock price might improve perceived trading liquidity [emphasis added] ... our focus is on maximizing Morningstar's long-term intrinsic value. ... In addition, a stock split wouldn't impact the stock's float in percentage terms, so it's not clear if it would substantially improve liquidity."

I couldn't have said it better myself. And finally, as for Rofin-Sinar's idea of splitting shares in two, then buying back the pieces -- could you be more wishy-washy? Pick a side, Rofin-Sinar.