Late on Valentine's Day, storage management specialist Network Appliance (NASDAQ:NTAP) released third-quarter 2007 earnings for the period ending Jan. 26.

  • In early December, NetApp closed its $160 million, all-cash acquisition of privately held data replication company Topio. The long-term debt has been on the balance sheet since a complex maneuver to repatriate foreign earnings, three quarters ago.
  • Revenues have been rising on their own, though; that acquisition brought in more brainpower than sales -- which is fine by me.
  • The operating and net margins have come in low a couple of times lately, as the company bulks up its sales and marketing.

(Figures in millions, except per-share data)

Income Statement Highlights

Q3 2007

Q3 2006

Change

Sales

$729.3

$537.0

35.8%

Net Profit

$66.5

$76.4

(12.9%)

EPS

$0.17

$0.20

(15.0%)

Diluted Shares

389.1

389.1

(0.0%)


Get back to basics with a look at the income statement.

Margin Checkup

Q3 2007

Q3 2006

Change*

Gross Margin

60.9%

60.9%

0.0

Operating Margin

9.9%

15.5%

(5.6)

Net Margin

9.1%

14.2%

(5.1)
*Expressed in percentage points.

Margins are the earnings engine. See how they work.

Management Effectiveness

Q3 2007

Q3 2006

Change*

Return On Assets

7.8%

11.3%

(3.5)

Return On Equity

13.5%

16.5%

(3.0)
*Expressed in percentage points.

See how management puts its financial tools to work.

Balance Sheet Highlights

Assets

Q3 2007

Q3 2006

Change

Cash + ST Invest.

$1,295.3

$1,140.9

13.5%

Accounts Rec.

$438.8

$367.5

19.4%

Inventory

$61.5

$64.1

(4.1%)


Liabilities

Q3 2007

Q3 2006

Change

Accounts Payable

$124.3

$99.7

24.6%

Long-Term Debt

$151.1

$0.0

N/A


Learn the ways of the balance sheet.

Cash Flow Highlights

Q3 2007

Q3 2006

Change

Cash From Ops.

$250.3

$140.9

77.6%

Capital Expenditures

$36.4

$33.5

8.8%

Free Cash Flow

$213.9

$107.5

99.1%

Owner Earnings

$59.7

$64.3

(7.1%)


Find out why Fools always follow the money.

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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. The Fool rules that are keeping him away from some of these stocks are here.