On March 1, computer maker Dell (NASDAQ:DELL) released fourth-quarter earnings for the period ended Feb. 2.

  • The results are preliminary; the second- and third-quarter 10-Qs have yet to be filed because of the ongoing SEC probe into the company's accounting practices. That's the reason you won't see any balance-sheet or cash-flow info below.
  • An 18% decline in desktop unit sales contributed to the 5% drop in revenue. Top competitors such as Hewlett-Packard (NYSE:HPQ) -- which passed Dell in market share last year -- are licking their lips.
  • Management expressed disappointment with the results, and newly reinstalled CEO Michael Dell promised to "transform the company."
  • Nearly 3,000 investors have rated the stock in Motley Fool CAPS, where it sports a mediocre two stars out of a possible five.

(Figures in millions, except per-share data)

Income Statement Highlights

Q4 2006

Q4 2005

Change

Sales

$14,402

$15,183

(5.1%)

Net Profit

$673

$1,012

(33.5%)

EPS

$0.30

$0.43

(30.2%)

Diluted Shares

2,251

2,375

(5.2%)



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

Margin Checkup

Q4 2006

Q4 2005

Change*

Gross Margin

17.1%

17.8%

(0.7)

Operating Margin

5.6%

8.2%

(2.7)

Net Margin

4.7%

6.7%

(2.0)

*Expressed in percentage points.

Margins are the earnings engine. See how they work.

Related Foolishness:

Dell is a recommendation of Motley Fool Inside Value and Motley Fool Stock Advisor. Read all about it with a free 30-day trial to either service.

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. This data has been provided by Netscribes. To provide feedback on this article, please click on the "feedback" button below.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.