Recs

1

Broadcom's Rebuilding Year: Fool by Numbers

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

51.5%

51.1%

0.4

Operating

2.3%

6.6%

(4.3)

Net

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.

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Related Tickers

2/14/2012 4:00 PM
BRCM $36.85 Up +0.03 +0.08%
Broadcom Corp CAPS Rating: ***
QCOM $61.71 Down -0.03 -0.05%
Qualcomm, Inc. CAPS Rating: *****
TXN $33.22 Down -0.04 -0.11%
Texas Instruments,… CAPS Rating: ****
IFX $0.00 Down +0.00 +0.00%
Infineon Technolog… CAPS Rating: **
INTC $26.78 Up +0.08 +0.30%
Intel Corp CAPS Rating: *****

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