On Jan. 18, titanic technologist IBM
- 7.5% revenue growth isn't overly impressive, but improved operational efficiency and a generous share buyback program delivered a 16% bottom-line gain -- and free cash flow is growing even faster.
- The cash flow boost didn't happen by skimping on infrastructure expenses, either, and only a handful of companies -- automakers and drug giants, mostly -- can match IBM's $1.6 billion quarterly research budget.
- Wall Street analysts seem to like Big Blue a lot, with 15 buy ratings versus one sell recommendation, but our own CAPS community disagrees and hands the company two measly stars. Who's right? Weigh in here with your own take.
(Figures in millions, except per-share data)
Income Statement Highlights
Q4 2006 |
Q4 2005 |
Change |
|
---|---|---|---|
Sales |
$26,257 |
$24,427 |
7.5% |
Net Profit |
$3,541 |
$3,187 |
11.1% |
EPS |
$2.31 |
$1.99 |
16.1% |
Diluted Shares |
1532.5 |
1604.8 |
(4.5%) |
Get back to basics with a look at the income statement.
Margin Checkup
Q4 2006 |
Q4 2005 |
Change* |
|
---|---|---|---|
Gross Margin |
44.6% |
45.1% |
(0.6) |
Operating Margin |
18.3% |
18.7% |
(0.4) |
Net Margin |
13.5% |
13.1% |
0.4 |
Margins are the earnings engine. See how they work.
Management Effectiveness
Q4 2006 |
Q4 2005 |
Change* |
|
---|---|---|---|
Return on Average Assets |
13.7% |
12.3% |
1.3 |
Return on Average Equity |
45.1% |
40.3% |
4.9 |
See how management puts its financial tools to work.
Balance Sheet Highlights
Assets and Liabilities |
Q4 2006 |
Q4 2005 |
Change |
---|---|---|---|
Cash + ST Invest. |
$10,657 |
$13,686 |
(22.1%) |
Long-Term Debt |
$13,780 |
$15,425 |
(10.7%) |
Learn the ways of the balance sheet.
Cash Flow Highlights
Q4 2006 |
Q4 2005 |
Change |
|
---|---|---|---|
Cash From Ops. |
$5,624 |
$3,614 |
55.6% |
Capital Expenditures |
$1,924 |
$1,045 |
84.1% |
Free Cash Flow |
$3,700 |
$2,569 |
44.0% |
Find out why Fools always follow the money.
Related Companies:
-
Accenture
(NYSE:ACN) -
Intel
(NASDAQ:INTC) -
Microsoft
(NASDAQ:MSFT) -
Hewlett-Packard
(NYSE:HPQ) -
Sun Microsystems
(NASDAQ:SUNW) -
Cisco Systems
(NASDAQ:CSCO)
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At the time of publication, Fool contributor Anders Bylund had no position in any company mentioned. Fool rules are here.