On Jan. 25, mobile communications giant Nokia
- The worldwide cell phone leader is still growing its business at a healthy pace. Weak North American sales were more than balanced by strength in Latin America, Asia/Pacific, and EMEA (Europe, the Middle East, and Africa).
- Like the other major cell phone makers, most of Nokia's growth came from low-end, low-margin phones. That's why gross margins slipped southward, but also why the strong earnings growth is so impressive -- management is squeezing more blood than ever from the stones it's been given.
- Cash flows and owner earnings are outpacing net income, which shows a penchant for conservative accounting. Fools generally like it when management doesn't try too hard to manage earnings to match up with analyst expectations, so that's a good thing.
(Figures in millions, except per-share data, and converted to U.S. dollars in historical exchange rates.)
Income Statement Highlights
|
Q4 2006 |
Q4 2005 |
Change |
|
|---|---|---|---|
|
Sales |
$13,929.8 |
$12,188.5 |
14.3% |
|
Net Profit |
$1,515.5 |
$1,265.7 |
19.7% |
|
EPS |
$0.38 |
$0.30 |
26.7% |
|
Diluted Shares |
4017.0 |
4250.6 |
(5.5%) |
Get back to basics with a look at the income statement.
Margin Checkup
|
Q4 2006 |
Q4 2005 |
Change* |
|
|---|---|---|---|
|
Gross Margin |
32.4% |
34.1% |
(1.7) |
|
Operating Margin |
13.0% |
13.2% |
(0.2) |
|
Net Margin |
10.9% |
10.4% |
0.5 |
Margins are the earnings engine. See how they work.
Management Effectiveness
|
Q4 2006 |
Q4 2005 |
Change* |
|
|---|---|---|---|
|
Return on Assets |
22.3% |
19.0% |
3.3 |
|
Return on Equity |
42.5% |
33.9% |
8.6 |
See how management puts its financial tools to work.
Balance Sheet Highlights
|
Assets |
Q4 2006 |
Q4 2005 |
Change |
|---|---|---|---|
|
Cash + ST Invest. |
$10,163.1 |
$11,794.5 |
(13.8%) |
|
Accounts Rec. |
$7,009.5 |
$6,306.0 |
11.2% |
|
Inventory |
$1,850.0 |
$1,967.5 |
(6.0%) |
|
Liabilities |
Q4 2006 |
Q4 2005 |
Change |
|---|---|---|---|
|
Accounts Payable |
$4,442.9 |
$4,121.4 |
7.8% |
|
Long-Term Debt |
$82.1 |
$24.8 |
231.6% |
Learn the ways of the balance sheet.
Cash Flow Highlights
|
Q4 2006 |
Q4 2005 |
Change |
|
|---|---|---|---|
|
Cash From Operations |
$1,760.0 |
$1,253.9 |
40.4% |
|
Capital Expenditures |
$188.6 |
$66.2 |
184.8% |
|
Free Cash Flow |
$1,571.3 |
$1,187.7 |
32.3% |
|
$1,540.0 |
$1,422.4 |
8.3% |
Find out why Fools always follow the money.
Cash Conversion Checkup
|
Q4 2006 |
Q4 2005 |
Change |
|
|---|---|---|---|
|
Days in Inventory |
22.6 |
22.7 |
(0.1) |
|
Days in Receivables |
46.3 |
44.1 |
2.1 |
|
Days Payables Outstanding |
47.1 |
47.2 |
(0.1) |
|
Cash Conversion Cycle |
21.8 |
19.7 |
2.2 |
Read up on cash conversion metrics.
Related Companies:
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Motorola
(NYSE:MOT) -
Qualcomm
(NASDAQ:QCOM) -
LM Ericsson
(NASDAQ:ERIC) -
Palm
(NASDAQ:PALM)
Related Foolishness:
Palm is a Motley Fool Stock Advisor selection. Find out which other companies Tom and David Gardner have given the nod to by taking a free trial today.
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. The Luddite Fool also didn't have a cell phone. Fool rules are here.
