On June 26, software giant Oracle (NASDAQ:ORCL) released full-year 2007 earnings for the period ended May 31.
- Stable margins and a modest stock buyback program helped Oracle preserve the revenue gains all through the income statement.
- The company's penchant for growth by acquisition has reduced the cash balance and increased the debt load a bit. But the combined $1.1 billion hit doesn't hurt that much, considering that Oracle spent $5 billion on the year's mergers and acquisitions. Most of the funding came from the massive free cash flow.
- Management aims for 20% growth in earnings per share every year, and easily met and beat that target in 2007.
- Oracle has a Motley Fool CAPS rating of three stars (out of a potential five), while competitors Microsoft (NASDAQ:MSFT) and IBM (NYSE:IBM) carry two- and three-star ratings, respectively.
(Figures in millions, except per-share data)
Income Statement Highlights
|
FY 2007 |
FY 2006 |
Change | |
|---|---|---|---|
|
Sales |
$17,996 |
$14,380 |
25.1% |
|
Net Profit |
$4,274 |
$3,381 |
26.4% |
|
EPS |
$0.81 |
$0.64 |
26.6% |
|
Diluted Shares |
5,269 |
5,287 |
(0.3%) |
Get back to basics with the income statement.
Margin Checkup
|
FY 2007 |
FY 2006 |
Change* | |
|---|---|---|---|
|
Gross Margin |
76.7% |
77.5% |
(0.8) |
|
Operating Margin |
33.2% |
32.9% |
0.3 |
|
Net Margin |
23.8% |
23.5% |
0.2 |
Margins are the earnings engine.
Balance Sheet Highlights
|
Assets |
FY 2007 |
FY 2006 |
Change |
|---|---|---|---|
|
Cash + ST Invest. |
$7,020 |
$7,605 |
(7.7%) |
|
Accounts Rec. |
$4,074 |
$3,022 |
34.8% |
|
Liabilities |
FY 2007 |
FY 2006 |
Change |
|---|---|---|---|
|
Accounts Payable |
$315 |
$268 |
17.5% |
|
Long-Term Debt |
$6,235 |
$5,735 |
8.7% |
The balance sheet reflects the company's health.
Cash Flow Highlights
|
FY 2007 |
FY 2006 |
Change | |
|---|---|---|---|
|
Cash From Ops. |
$5,520 |
$4,541 |
21.6% |
|
Capital Expenditures |
$319 |
$236 |
35.2% |
|
Free Cash Flow |
$5,201 |
$4,305 |
20.8% |
|
$5,241 |
$4,173 |
25.6% |
Free cash flow is a Fool's best friend.
Related Foolishness:
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 had no position in any company mentioned. Microsoft is a Motley Fool Inside Value recommendation. Fool rules are here.
