On June 26, CKE Restaurants (NYSE:CKR), operator of Hardee's and Carl's Jr. fast-food restaurants, released Q1 2007 earnings for the period ended May 22.

  • Earnings per share came in ahead of estimates, even after accounting for stock-based compensation of $1.8 million.
  • This is the fourth quarter in a row where both gross margin and operating margin increased.
  • The increased tax expense of $10.8 million was mostly covered by use of the deferred tax asset.
  • Get one Fool's take on CKE's latest quarter.

(Figures in millions, except per-share data)

Income Statement Highlights

Avg. Est.

Q1 2007

Q1 2006

Change

Sales

$485.2

$488.6

$465.9

4.9%

Net Profit

--

$16.2

$16*

1.1%

EPS**

$0.21

$0.23

$0.24*

(4.2%)

Diluted Shares

73.2

73.7

(0.7%)

*Not adjusted for stock-based compensation.
**Includes after tax interest expense adjustment

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

Margin Checkup

Q1 2007

Q1 2006

Change*

Gross Margin**

71.4%

70.90%

0.50

Operating Margin

6.88%

4.97%

1.91

Net Margin

3.31%

3.43%

(0.12)

*Expressed in percentage points.
**Food and packaging costs divided by company restaurant sales

Margins are the earnings engine. See how they work.

Balance Sheet Highlights

Assets

Q1 2007

Q1 2006

Change

Cash + ST Invest.

$22.9

$20.0

14.2%

Accounts Rec.

$31.8

$32.8

(2.8%)

Inventory

$22.6

$21.6

4.7%



Liabilities

Q1 2007

Q1 2006

Change

Accounts Payable

$62.1

$60.3

3.1%

Long-Term Debt

$210.5

$227.5

(7.5%)



Learn the ways of the balance sheet.

Cash Flow Highlights

Q1 2007

Q1 2006

Change

Cash From Ops.

$47.0

$39.9

17.7%

Capital Expenditures

$34.6

$25.2

37.3%

Free Cash Flow

$12.4

$14.7

(15.6%)



Find out why Fools always follow the money.

Related Companies:

  • Burger King Holdings (NYSE:BKC)
  • McDonalds (NYSE:MCD)
  • Wendy's (NYSE:WEN)
  • Yum! Brands (NYSE:YUM)

Related Foolishness:

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, Jim Mueller had no position in any company mentioned. Fool rules are here.