Apple's Hot Summer, Finally: Fool by Numbers

On Dec. 29, computer and digital media maven Apple Computer (Nasdaq: AAPL  ) re-released third-quarter 2006 earnings for the period ended July 1, 2006, after completing its review of past stock options grants.

• This was indeed a fine quarter, just as we all thought back in July, before this restatement.
• Apple's debt-free cash balance rivals that of Google (Nasdaq: GOOG  ) or even IBM (NYSE: IBM  ) . Whither all that cash, Steve?
• Despite all the great results coming out of Cupertino, Apple is only a two-star stock in our Motley Fool CAPS community. Add your $0.02 to the debate today.

(Figures in millions, except per-share data)

Income Statement Highlights

	Q3 2006	Q3 2005	Change
Sales	$4,370.0	$3,520.0	24.1%
Net Profit	$472.0	$319.0	48.0%
EPS	$0.54	$0.37	45.9%
Diluted Shares	876.4	860.8	1.8%

Get back to basics with a look at the income statement.

Margin Checkup

	Q3 2006	Q3 2005	Change*
Gross Margin	30.3%	29.7%	0.7
Operating Margin	13.0%	12.1%	0.9
Net Margin	10.8%	9.1%	1.7

*Expressed in percentage points

Margins are the earnings engine. See how they work.

Management Effectiveness

	Q3 2006	Q3 2005	Change*
Return on Average Assets	13.0%	12.4%	0.6
Return on Average Equity	21.0%	19.3%	1.6

*Expressed in percentage points

See how management puts its financial tools to work.

Balance Sheet Highlights

Assets	Q3 2006	Q3 2005	Change
Cash + ST Invest.	$9,176.0	$7,526.0	21.9%
Accounts Rec.	$1,089.0	$827.0	31.7%
Inventory	$213.0	$193.0	10.4%

Liabilities	Q3 2006	Q3 2005	Change
Accounts Payable	$2,513.0	$1,530.0	64.2%
Long-Term Debt	$0.0	$0.0	N/A

Learn the ways of the balance sheet.

Cash Flow Highlights

	YTD 2006	YTD 2005	Change
Cash From Ops.	$1,165.0	$1,783.0	(34.7%)
Capital Expenditures	$512.0	$164.0	212.2%
Free Cash Flow	$653.0	$1,619.0	(59.7%)

Find out why Fools always follow the money.

Related Companies:

• Microsoft (Nasdaq: MSFT  )
• Dell (Nasdaq: DELL  )
• Gateway (NYSE: GTW  )

Related Foolishness:

• 2006: Year of the Apple?
• 2006 in Review: Apple
• The Best Blue Chip for 2007: Apple
• Dueling Fools: Apple
• Apple Gets Creative

Dell and Microsoft are two of the official recommendations of our Motley Fool Inside Value newsletter, and Dell is also a Stock Advisor pick. Find out more with a free 30-day trial under your belt.

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, Fool contributor Anders Bylund had no position in any company mentioned. Fool rules are here .