On Jan. 19, mobile communications expert Motorola
- The bright spot in this report is the healthy revenue and market share increases -- but those achievements came at a serious cost.
- Margins keep sliding south as Motorola grows in developing markets, where disposable income is scarce and low-end cell phones are the norm. Then again, the competition is feeling the same squeeze.
- That $15.6 billion cash hoard is coming in handy; after the close of the reported quarter, Motorola spent more than $3.9 billion on two acquisitions in the mobile enterprise sector.
(Figures in millions, except per-share data)
Income Statement Highlights
Q4 2006 |
Q4 2005 |
Change |
|
---|---|---|---|
Sales |
$11,792 |
$10,039 |
17.5% |
Net Profit |
$624 |
$1,202 |
(48.1%) |
EPS |
$0.24 |
$0.47 |
(48.9%) |
Diluted Shares |
2563.6 |
2559.9 |
0.1% |
Get back to basics with a look at the income statement.
Margin Checkup
Q4 2006 |
Q4 2005 |
Change* |
|
---|---|---|---|
Gross Margin |
26.0% |
31.6% |
(5.6) |
Operating Margin |
6.4% |
17.0% |
(10.7) |
Net Margin |
5.3% |
12.0% |
(6.7) |
Margins are the earnings engine. See how they work.
Management Effectiveness
Q4 2006 | Q4 2005 | Change* | |
---|---|---|---|
Return On Average Assets | 6.6% | 13.9% | (7.3) |
Return On Average Equity | 14.6% | 29.6% | (15.1) |
See how management puts its financial tools to work.
Balance Sheet Highlights
Assets | Q4 2006 | Q4 2005 | Change |
---|---|---|---|
Cash + ST Invest. | $15,640 | $14,785 | 5.8% |
Accounts Rec. | $7,509 | $5,652 | 32.9% |
Inventory | $3,162 | $2,422 | 30.6% |
Liabilities | Q4 2006 | Q4 2005 | Change |
---|---|---|---|
Accounts Payable | $5,056 | $4,295 | 17.7% |
Long-Term Debt | $2,704 | $3,806 | (29.0%) |
Learn the ways of the balance sheet.
Cash Flow Highlights
Motorola didn't hand out cash flow information for the quarter beyond approximately $700 million in operation cash flow. That's down about 65% year over year, though.
Find out why Fools always follow the money.
Cash Conversion Checkup
Q4 2006 | Q4 2005 | Change | |
---|---|---|---|
Days in Inventory | 30.3 | 29.4 | 0.9 |
Days in Receivables | 55.9 | 50.7 | 5.2 |
Days Payables Outstanding | 50.9 | 49.1 | 1.7 |
Cash Conversion Cycle | 35.4 | 31.0 | 4.4 |
Read up on cash conversion metrics.
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At the time of publication, Anders Bylund had no position in any company mentioned. Fool rules are here.