On Dec. 7, semiconductor manufacturer National Semiconductor (NYSE:NSM) released Q2 2007 earnings for the period ended Nov. 26, 2006.
- Inventory buildup over the past year made the cash conversion metrics look a lot worse this time around. Inventory levels actually decreased 9.1% sequentially, though, so recent trends are pointing the right way.
- Lower revenues put a squeeze on profit margins, as SG&A expenses increased by 13.5%.
- OK, so earnings were down. How about free cash flow? Down. Operational cash flow? Also down. Owner earnings? Sorry, bud. No matter how you slice it, this was a pretty disappointing earnings performance.
(Figures in millions, except per-share data)
Income Statement Highlights
|
Avg. Est. |
Q2 2007 |
Q2 2006 |
Change | |
|---|---|---|---|---|
|
Sales |
$501 |
$501.6 |
$544.0 |
(7.8%) |
|
Net Profit |
-- |
$91.4 |
$114.7 |
(20.3%) |
|
EPS |
$0.27 |
$0.27 |
$0.32 |
(15.6%) |
|
Diluted Shares | -- |
335.6 |
356.7 |
(5.9%) |
Get back to basics with a look at the income statement.
Margin Checkup
|
Q2 2007 |
Q2 2006 |
Change* | |
|---|---|---|---|
|
Gross Margin |
58.89% |
57.22% |
1.67 |
|
Operating Margin |
24.80% |
29.54% |
(4.74) |
|
Net Margin |
18.22% |
21.08% |
(2.86) |
Margins are the earnings engine. See how they work.
Balance Sheet Highlights
|
Assets |
Q2 2007 |
Q2 2006 |
Change |
|---|---|---|---|
|
Cash + ST Invest. |
$780.6 |
$970.0 |
(19.5%) |
|
Accounts Rec. |
$184.7 |
$168.7 |
9.5% |
|
Inventory |
$177.8 |
$160.7 |
10.6% |
|
Liabilities |
Q2 2007 |
Q2 2006 |
Change |
|---|---|---|---|
|
Accounts Payable |
$64.1 |
$91.3 |
(29.8%) |
|
Long-Term Debt |
$21.1 |
$21.1 |
0% |
Learn the ways of the balance sheet.
Cash Flow Highlights
|
Six-Month Totals |
Q2 2007 |
Q2 2006 |
Change |
|---|---|---|---|
|
Cash From Ops. |
$278.2 |
$366.2 |
(24%) |
|
Capital Expenditures |
$70.6 |
$46.4 |
52.2% |
|
Free Cash Flow |
$207.6 |
$319.8 |
(35.1%) |
|
$170.0 |
$203.9 |
(16.6%) |
Find out why Fools always follow the money.
Cash Management Checkup
|
Q2 2007 |
Q2 2006 |
Change | |
|---|---|---|---|
|
Days in Inventory |
81.5 |
61.5 |
20.1 |
|
Days in Receivables |
34.1 |
26.7 |
7.4 |
|
Days Payables Outstanding |
32.0 |
30.2 |
1.8 |
|
Cash Conversion Cycle |
83.7 |
58.0 |
25.7 |
Read up on cash conversion metrics.
Related Companies:
- Texas Instruments (NYSE:TXN)
- Marvell Technology (NASDAQ:MRVL)
- On Semiconductor (NASDAQ:ONNN)
- Omnivision Technologies (NASDAQ:OVTI)
- Silicon Image (NASDAQ:SIMG)
- Microsemi (NASDAQ:MSCC)
Related Foolishness:
- Have a look at National Semi, the 5-star CAPS stock.
- Foolish Forecast: National Semi Taking It Slow
- Foolish Fundamentals: Margins
- Foolish Fundamentals: Inventory
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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.
