On Sept. 19, 2006, Darden Restaurants (NYSE:DRI), home to such favorites as Red Lobster and Olive Garden, released first-quarter earnings for the period ended Aug. 27, 2006.

  • The company continues to repurchase shares (2.3 million this quarter), which made up the larger part of the EPS growth. What should we expect?! Olive Garden and Red Lobster have been around a while.
  • Same-store sales at Olive Garden increased, while they decreased at Red Lobster. Don't worry. My wife and I will do our part next quarter.
  • While the company looks for places to put its cash to use, it decided to increase its dividend to $0.23 per share, semiannually.

(Figures in millions, except per-share data)

Income Statement Highlights

Avg. Est.

Q1 2007

Q1 2006

Change

Sales

$1,462

$1,456

$1,409

3.3%

Net Profit

--

$89

$86

3.5%

EPS

$0.58

$0.59

$0.53

11.3%

Diluted Shares

150

160

(6.3%)

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

Margin Checkup

Q1 2007

Q1 2006

Change*

Food & Beverage Margin

71.32%

70.25%

1.07

Restaurant Margin

23.7%

23.1%

0.60

Operating Margin

9.67%

9.86%

(0.19)

Net Margin

6.08%

6.07%

0.01

*Expressed in percentage points.

Margins are the earnings engine. See how they work.

Balance Sheet Highlights

Assets

Q1 2007

Q1 2006

Change

Cash + ST Invest.

$46

$345

(86.8%)

Accounts Rec.

$62

$40

54.2%

Inventory

$209

$226

(7.5%)



Liabilities

Q1 2007

Q1 2006

Change

Accounts Payable

$196

$229

(14.5%)

Long-Term Debt

$494

$647

(23.7%)

Learn the ways of the balance sheet.

Cash Flow Highlights

The cash flow statement must be stuck in a lobster trap up in Maine, as there wasn't one in the release. Not very Foolish.

Find out why Fools always follow the money.

Related Companies:

  • Brinker (NYSE:EAT)
  • Ruby Tuesday (NYSE:RI)
  • Applebee's (NASDAQ:APPB)
  • OSI Restaurant Partners (NYSE:OSI)
  • O'Charley's (NASDAQ:CHUX)

For another Foolish helping:

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 checkFool.comfor more of our in-depth discussion of what the numbers mean.

Darden Restaurants increased its dividend this quarter. Could it pop up on Motley Fool Income Investor lead analyst Mathew Emmert's screen? I don't know, but afree trialcan show you other dividend payers that have.

At the time of publication, Fool contributor David Meier did not own shares in any of the companies mentioned. Fool rules for disclosure are here.