United Online Logs On to Profits: Fool by Numbers

On Nov. 2, United Online (Nasdaq: UNTD), the brains behind NetZero, Juno, and Classmates.com, released third-quarter earnings for the period ended Sept. 30, 2006.

• Although revenue decreased by 2.4%, net income still increased by 6.7%, partially due to the cost structure reorganization of the communications segment.
• The reorganization of the communications segment allowed United Online to focus on the content and media segment, which strengthened its pay accounts to 2.2 million, up 35% over last year and capturing 44% of all pay accounts.
• The CAPS community is fully behind United Online. Out of its 25 ratings, 22 give United the green light. Maybe it's time to log in to CAPS yourself.

(Figures in thousands, except per-share data)

Income Statement Highlights

	Q3 2006	Q3 2005	Change
Sales	$129,636	$132,778	(2.4%)
Net Profit	$13,436	$12,594	6.7%
EPS	$0.20	$0.20	0.0%
Diluted Shares	66,583	64,107	3.9%

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

Margin Checkup

	Q3 2006	Q3 2005	Change*
Gross Margin	77.59%	79.49%	(1.90)
Operating Margin	16.88%	17.05%	(0.17)
Net Margin	10.36%	9.49%	0.87

*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.	$160,947	$240,993	(33.2%)
Accounts Rec.	$26,264	$20,879	25.8%

Liabilities	Q3 2006	Q3 2005	Change
Accounts Payable	$37,897	$51,333	(26.2%)
Long-Term Debt	$0	$41,835	(100.0%)

Learn the ways of the balance sheet.

Cash Flow Highlights

	YTD 2006	YTD 2005	Change
Cash From Ops.	$25,722	$41,865	(38.6%)
Capital Expenditures	$2,939	$7,981	(63.2%)
Free Cash Flow	$22,783	$33,884	(32.8%)

Find out why Fools always follow the money.

Related Companies:

• EarthLink (Nasdaq: ELNK)
• Microsoft (Nasdaq: MSFT)

Related Foolishness:

• Facebook's Public Offering
• Payback at AOL
• EarthLink, a World of Wonder

Microsoft is a Motley Fool Inside Value recommendation. To find out why, take a free 30-day trial here .

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. This data has been provided by Netscribes. To provide feedback on this article, please click on the "feedback" button below.