On March 16, communications infrastructure specialist Nortel Networks
- Legal costs and benefits, along with restructuring charges, added to up $114 million this year and a whopping $2.6 billion in 2005. Back out these one-time costs, and the tables are turned -- last year's $0.08 profits per share turned into this year's $0.20 loss.
- I'd respect the increased cash position more if it wasn't matched by a larger debt load.
- Nearly 9% higher sales sounds great, until you glance at what the competition is doing. LM Ericsson
(NASDAQ:ERIC) grows trailing revenues at a 17% clip; Nokia(NYSE:NOK) musters 20%; archrival Cisco Systems(NASDAQ:CSCO) presents a 23% top-line growth rate; and JDS Uniphase(NASDAQ:JDSU) came up with a 45% year-over-year sales increase. - If this sounds negative, you should check out the company's Motley Fool CAPS page, where it has earned our lowest rating of one star. Too harsh? Get a 100% free CAPS account and chime in with your own analysis today.
(Figures in millions, except per-share data)
Income Statement Highlights
FY 2006 |
FY 2005 |
Change |
|
---|---|---|---|
Sales |
$11,418 |
$10,509 |
8.6% |
Net Profit |
$28.0 |
($2,610) |
N/A |
EPS |
$0.06 |
($6.02) |
N/A |
Diluted Shares |
434.0 |
433.8 |
0.0% |
Get back to basics with the income statement.
Margin Checkup
FY 2006 |
FY 2005 |
Change* |
|
---|---|---|---|
Gross Margin |
38.9% |
40.7% |
(1.8) |
Operating Margin |
2.4% |
(26.0%) |
28.4 |
Net Margin |
0.3% |
(24.8%) |
25.1 |
Margins are the earnings engine.
Balance Sheet Highlights
Assets |
FY 2006 |
FY 2005 |
Change |
---|---|---|---|
Cash + ST Invest. |
$3,492 |
$2,951 |
18.3% |
Accounts Rec. |
$2,785 |
$2,826 |
(1.5%) |
Inventory |
$1,989 |
$2,080 |
(4.4%) |
Liabilities |
FY 2006 |
FY 2005 |
Change |
---|---|---|---|
Accounts Payable |
$1,125 |
$1,181 |
(4.7%) |
Long-Term Debt |
$4,464 |
$3,885 |
14.9% |
The balance sheet reflects the company's health.
Cash Flow Highlights
FY 2006 |
FY 2005 |
Change |
|
---|---|---|---|
Cash From Ops. |
$237 |
($179) |
N/A |
Capital Expenditures |
$173 |
$248 |
(30.2%) |
Free Cash Flow |
$64 |
($427) |
N/A |
($74) |
($657) |
88.7% |
Free cash flow is a Fool's best friend.
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At the time of publication, Anders Bylund had no position in any company mentioned. Fool rules are here.