Broadcom's Brutal Blueprints: Fool by Numbers

On Oct. 23, communications chip maker Broadcom (NASDAQ:BRCM) released third-quarter earnings for the period ended Sept. 30, 2007.

• Operating income dropped 97% to a mere $1.5 million -- mostly because the research and development budget increased by 29% while sales only grew 5.2%. A technology business can commit worse crimes in this Fool's book than investing in R&D.
• The bottom line was rescued from the Red Ink Sea by the balance sheet. The strong and debt-free cash balance generated $31.4 million in net interest income.
• As shocking as these numbers may look when compared to the year-ago period, it's simply the logical continuation of a broader trend. Fellow Fool Dave Mock can explain it in plain English.

(Figures in millions, except per-share data)

Income Statement Highlights

Get back to basics with the income statement.

Margin Checkup

Margins are the earnings engine.

Balance Sheet Highlights

The balance sheet reflects the company's health.

Cash Flow Highlights

Free cash flow is a Fool's best friend.

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