By
Anders Bylund
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More Articles
January 25, 2008
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On Jan. 24, software titan Microsoft (Nasdaq: MSFT ) released second-quarter 2008 earnings for the period ending Dec. 31, 2007.
- The laggards in Microsoft's portfolio are the usual suspects: the entertainment and devices division grew sales at a tepid 3% compared to the year-ago quarter, and the online services segment doubled its loss from operations to $245 million.
- There is a silver lining for each underperformer, though. The online business reported 38% higher sales, and entertainment products like the Xbox 360 actually made a $357 million profit this time.
- All of that sort of drowns in the flood of cash that flows out of the Redmond machine, though. A 92% year-over-year EPS increase is no mean feat for a giant that juggles billions, not millions, in each hand.
(Figures in millions, except per-share data.)
Income Statement Highlights
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Q2 2008
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Q2 2007
|
Change
|
|
Sales
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$16,367
|
$12,542
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30.5%
|
|
Net Profit
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$4,707
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$2,626
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79.2%
|
|
EPS
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$0.50
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$0.26
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92.3%
|
|
Diluted Shares
|
9,503.0
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9,942.0
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(4.4%)
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Get back to basics with the income statement.
Margin Checkup
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Q2 2008
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Q2 2007
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Change*
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Gross
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78.4%
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71.1%
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7.3
|
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Operating
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39.6%
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27.7%
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11.9
|
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Net
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28.8%
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20.9%
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7.9
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*Expressed in percentage points.
Margins are the earnings engine.
Balance Sheet Highlights
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Assets
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Q2 2008
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Q2 2007
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Change
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|
Cash + ST Invest.
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$21,076
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$26,400
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(20.2%)
|
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Accounts Rec.
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$11,621
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$9,895
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17.4%
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Inventory
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$755
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$1,725
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(56.2%)
|
|
Liabilities
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Q2 2008
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Q2 2007
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Change
|
|
Accounts Payable
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$3,612
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$2,944
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22.7%
|
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Long-Term Debt
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$0
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$0
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N/A
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The balance sheet reflects the company's health.
Cash Flow Highlights
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Q2 2008
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Q2 2007
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Change
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|
Cash From Ops.
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$4,567
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$2,042
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123.7%
|
|
Capital Expenditures
|
$695
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$572
|
21.5%
|
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Free Cash Flow
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$3,872
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$1,470
|
163.4%
|
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Owner Earnings
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$4,493
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$2,419
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85.7%
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Free cash flow is a Fool's best friend.
Competitive Context
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Market Cap
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Trailing P/E Ratio
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CAPS Rating
|
|
Microsoft
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$323,510
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22.7
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***
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Apple (Nasdaq: AAPL )
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$120,780
|
30.2
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***
|
|
International Business Machines (NYSE: IBM )
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$147,900
|
14.8
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***
|
|
Oracle (Nasdaq: ORCL )
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$107,920
|
23.0
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****
|
|
Adobe Systems (Nasdaq: ADBE )
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$20,160
|
29.0
|
****
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Using the latest reported numbers from Capital IQ. Keep your partners close and the competition in your vest pocket.
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