Dazzle them, Master, with a word
Such as the universe has never heard;
Whisper it till the earth's foundations quake,
 And fiery worlds awake
 And shake
Their burning pinions, and ring out the cry
 That shrilly echoes
Where between whirling planets flows
The ardent stream of palpitating light.
-- C.M. Verschoyle, "The Deliverer"

On April 19, Internet search and advertising champion Google (NASDAQ:GOOG) released first-quarter 2007 earnings for the period ended March 31. Google delivered fairly well, although the description above is more a homage to National Poetry Month than a factual description. Google's quarter wasn't that Earth-shakingly awesome.

  • Revenues minus traffic acquisition costs came in at $2.5 billion, just as expected. The continued strength of Google's earnings growth keeps baffling investors and analysts alike.

  • Even after winning a bidding war with Microsoft (NASDAQ:MSFT) to acquire the other online advertising powerhouse, DoubleClick, for $3.1 billion, there will be plenty of debt-free cash left in the company's Mountain View coffers. More than $8.8 billion, in fact.

  • International revenues are growing faster than the domestic take, rising to 47% of sales, compared to 42% last year. Clearly, Google doesn't intend to let the likes of Baidu (NASDAQ:BIDU), Yahoo! (NASDAQ:YHOO), and Rediff (NASDAQ:REDF) have all of the overseas fun to themselves.

(Figures in millions, except per-share data)

Income Statement Highlights

Q1 2007

Q1 2006

Change

Sales

$3,664

$2,254

62.6%

Net Profit

$1,002

$592

69.2%

EPS

$3.18

$1.95

63.1%

Diluted Shares

314.9

304.1

3.5%

Get back to basics with the income statement.

Margin Checkup

Q1 2007

Q1 2006

Change*

Gross Margin

59.9%

59.9%

0.0

Operating Margin

33.3%

33%

0.4

Net Margin

27.4%

26.3%

1.1

*Expressed in percentage points.

Margins are the earnings engine.

Balance Sheet Highlights

Assets

Q1 2007

Q1 2006

Change

Cash + ST Invest.

$11,936

$8,429

41.6%

Accounts Rec.

$1,477

$844

74.9%

Liabilities

Q1 2007

Q1 2006

Change

Accounts Payable

$182

$146

24.6%

Long-Term Debt

$0

$0

N/A

The balance sheet reflects the company's health.

Cash Flow Highlights

Q1 2007

Q1 2006

Change

Cash From Ops.

$1,220

$825

47.9%

Capital Expenditures

$597

$345

73%

Free Cash Flow

$623

$480

29.8%

Owner Earnings

$610

$363

68.3%

Free cash flow is a Fool's best friend.

Related Foolishness:

Yahoo! is a Motley Fool Stock Advisor recommendation, Microsoft is an Inside Value selection, and Baidu is a Rule Breakers pick. Find out more about the joys of international web properties with a free 30-day trial pass to any of our market-beating newsletter services.

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. He's slightly disappointed that the new share count wasn't approximately 3.14159265 hectomillion -- it was so darn close. Fool rules are here.