On March 28, Resources Connection (NASDAQ:RECN) released third-quarter earnings for the period ended Feb. 28.

  • International expansion helped grow revenue by 17%.
  • Escalating SG&A costs contributed to diminishing margins and lower profits.
  • Resources Connection boasts a four-star rating in Motley Fool CAPS, while competitor Gartner (NYSE:IT) only rates two stars.

(Figures in millions, except per-share data)

Income Statement Highlights

Q3 2007

Q3 2006

Change

Sales

$187.5

$160.3

17.0%

Net Profit

$13.1

$13.8

(4.9%)

EPS

$0.26

$0.27

(3.7%)

Diluted Shares

51.1

51.9

(1.6%)

Get back to basics with the income statement.

Margin Checkup

Q3 2007

Q3 2006

Change*

Gross Margin

38.2%

38.1%

0.1

Operating Margin

11.2%

13.3%

(2.1)

Net Margin

7.0%

8.6%

(1.6)

*Expressed in percentage points.

Margins are the earnings engine.

Balance Sheet Highlights

Assets

Q3 2007

Q3 2006

Change

Cash + Invest.

$222.6

$149.2

49.2%

Accounts Rec.

$107.8

$93.5

15.2%

No liabailities data available.

The balance sheet reflects the company's health.

Cash Flow Highlights

No data available. Lame.

Free cash flow is a Fool's best friend.

Related Foolishness:

Resources Connection is a Stock Advisor recommendation. To check out more of the Fool's picks, try a free subscription for 30 days.

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