On Jan. 25, software king Microsoft
- These figures exclude $1.64 billion of unearned revenues, preorders for Windows Vista and Office 2007 that have yet to launch. Those items will hit stores next week, and the next quarter will add that line back into net sales. The bottom-line impact should be about $0.11 per diluted share.
- The new hotness a year ago was the Xbox 360, and Microsoft couldn't make them fast enough to satisfy early demand. This year, there are some consoles on shelves and in warehouses, and the price per unit hasn't dropped since it was launched, so there's one reason for the rising inventory levels.
- I've been wondering what a couple of Microsoft's competitors intend to do with their cash balances, but $10 billion looks petty next to the Redmond giant's constant $30 billion stash -- give or take a couple of measly billion. The difference is that we all know that Microsoft has acquisitions in its blood, and now comes with a 1.3% dividend yield, too. No mystery there.
(Figures in millions, except per-share data)
Income Statement Highlights
Q2 2007 |
Q2 2006 |
Change |
|
---|---|---|---|
Sales |
$12,542 |
$11,837 |
6.0% |
Net Profit |
$2,626 |
$3,653 |
(28.1%) |
EPS |
$0.26 |
$0.34 |
(23.5%) |
Diluted Shares |
9,942 |
10,638 |
(6.5%) |
Get back to basics with a look at the income statement.
Margin Checkup
Q2 2007 |
Q2 2006 |
Change* |
|
---|---|---|---|
Gross Margin |
71.1% |
81.1% |
(9.9) |
Operating Margin |
27.7% |
39.3% |
(11.7) |
Net Margin |
20.9% |
30.9% |
(9.9) |
Margins are the earnings engine. See how they work.
Management Effectiveness
Q2 2007 |
Q2 2006 |
Change* |
|
---|---|---|---|
Return On Assets |
15.9% |
21.1% |
(5.1) |
Return On Equity |
28.9% |
31.6% |
(2.7) |
See how management puts its financial tools to work.
Balance Sheet Highlights
Assets |
Q2 2007 |
Q2 2006 |
Change |
---|---|---|---|
Cash + ST Invest. |
$28,873 |
$34,701 |
(16.8%) |
Accounts Rec. |
$9,895 |
$7,758 |
27.5% |
Inventory |
$1,725 |
$1,003 |
72.0% |
Liabilities |
Q2 2007 |
Q2 2006 |
Change |
---|---|---|---|
Accounts Payable |
$2,944 |
$2,477 |
18.9% |
Long-Term Debt |
$0 |
$0 |
N/A |
Learn the ways of the balance sheet.
Cash Flow Highlights
Q2 2007 |
Q2 2006 |
Change |
|
---|---|---|---|
Cash From Ops. |
$2,042 |
$2,231 |
(8.5%) |
Capital Expenditures |
$572 |
$318 |
79.9% |
Free Cash Flow |
$1,470 |
$1,913 |
(23.2%) |
$2,419 |
$3,566 |
(32.2%) |
Find out why Fools always follow the money.
Cash Conversion Checkup
Q2 2007 |
Q2 2006 |
Change |
|
---|---|---|---|
Days in Inventory |
52.8 |
34.7 |
18.0 |
Days in Receivables |
60.2 |
51.5 |
8.6 |
Days Payables Outstanding |
66.5 |
87.0 |
(20.5) |
Cash Conversion Cycle |
46.5 |
(0.7) |
47.2 |
Read up on cash conversion metrics.
Related Companies:
-
Apple
(NASDAQ:AAPL) -
Sony
(NYSE:SNE) -
Electronic Arts
(NASDAQ:ERTS) -
IBM
(NYSE:IBM) -
Oracle
(NASDAQ:ORCL) -
Google
(NASDAQ:GOOG)
Related Foolishness:
Microsoft is a Motley Fool Inside Value pick, and Electronic Arts piqued the interest of our flagship Motley Fool Stock Advisor newsletter service. Grab a couple of free 30-day trials -- no strings attached -- and check out what the fuss is all about.
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At the time of publication, Anders Bylund had no position in any company mentioned. Fool rules are here.