Broadcom's Rebuilding Year: Fool by Numbers
By Anders Bylund
January 25, 2008
Recommended (1)
On Jan. 24, communications chip designer Broadcom (Nasdaq: BRCM) released earnings for the 2007 fiscal year, a period ended Dec. 31.
- Broadcom's profit margins deteriorated all through 2007 in a tough competitive environment -- only to jump back with a vengeance in the fourth quarter. Management credits successful launches of new Bluetooth, digital TV, and wireless networking products for the comeback.
- The balance sheet made it through this tough year fairly intact and still debt-free.
(Figures in millions, except per-share data)
Income Statement Highlights
|
FY 2007
|
FY 2006
|
Change
|
|
Sales
|
$3,776
|
$3,668
|
3%
|
|
Net Profit
|
$213
|
$379
|
(43.7%)
|
|
EPS
|
$0.37
|
$0.64
|
(42.2%)
|
|
Diluted Shares
|
577.7
|
588.3
|
(1.8%)
|
Get back to basics with the income statement.
Margin Checkup
|
FY 2007
|
FY 2006
|
Change*
|
|
Gross Margin
|
51.5%
|
51.1%
|
0.4
|
|
Operating Margin
|
2.3%
|
6.6%
|
(4.3)
|
|
Net Margin
|
5.7%
|
10.3%
|
(4.6)
|
*Expressed in percentage points.
Margins are the earnings engine.
Balance Sheet Highlights
|
Assets
|
FY 2007
|
FY 2006
|
Change
|
|
Cash + Short-Term Investments
|
$2,328
|
$2,680
|
(13.1%)
|
|
Accounts Receivable
|
$369
|
$383
|
(3.6%)
|
|
Inventory
|
$231
|
$203
|
14.1%
|
|
Liabilities
|
FY 2007
|
FY 2006
|
Change
|
|
Accounts Payable
|
$314
|
$308
|
1.8%
|
|
Long-Term Debt
|
$0
|
$0
|
N/A
|
The balance sheet reflects the company's health.
Cash Flow Highlights
|
FY 2007
|
FY 2006
|
Change
|
|
Cash From Operations
|
$832
|
$892
|
(6.7%)
|
|
Capital Expenditures
|
$160
|
$92
|
72.6%
|
|
Free Cash Flow
|
$672
|
$799
|
(15.9%)
|
|
Owner Earnings
|
$130
|
$347
|
(62.6%)
|
Free cash flow is a Fool's best friend.
Competitive Context
|
Market Cap
|
Trailing P/E Ratio
|
CAPS Rating
|
|
Intel (Nasdaq: INTC)
|
$121,008
|
17.6
|
****
|
|
Qualcomm (Nasdaq: QCOM)
|
$66,460
|
20.8
|
***
|
|
Texas
Instruments (NYSE: TXN)
|
$40,320
|
16.3
|
****
|
|
Broadcom
|
$12,540
|
80.2
|
***
|
|
Infineon Technologies AG (NYSE: IFX)
|
$6,920
|
N/A
|
**
|
Using the latest reported numbers from Capital IQ. Keep your partners close and the competition in your vest pocket.
Related Foolishness:
Get the best of the Fool delivered to your inbox every Friday
Terms & Conditions
RSS Headlines
Fool UK