On July 30, computing powerhouse Sun Microsystems
- It looks like the turnaround plans are working for Sun. This is the first GAAP-profitable fiscal year since 2001.
- Sales growth has slowed down, but profits are up -- a combination that often shows a company that isn't interested in chasing sales at any price when it can pursue higher-quality revenue instead.
- Expect that share dilution to turn around soon. There's a freshly board-approved $3 billion authorization for share repurchases on the table.
(Figures in millions, except per-share data)
Income Statement Highlights
|
FY 2007 |
FY 2006 |
Change |
|
|---|---|---|---|
|
Sales |
$13,873 |
$13,068 |
6.2% |
|
Net Profit |
$473 |
($864) |
N/A |
|
EPS |
$0.13 |
($0.25) |
N/A |
|
Diluted Shares |
3,606 |
3,437 |
4.9% |
Get back to basics with the income statement.
Margin Checkup
|
FY 2007 |
FY 2006 |
Change* |
|
|---|---|---|---|
|
Gross Margin |
45.2% |
43.1% |
2.1 |
|
Operating Margin |
2.2% |
(6.7%) |
8.9 |
|
Net Margin |
3.4% |
(6.6%) |
10.0 |
Margins are the earnings engine.
Balance Sheet Highlights
|
Assets |
FY 2007 |
FY 2006 |
Change |
|---|---|---|---|
|
Cash + ST Invest. |
$4,582 |
$4,065 |
12.7% |
|
Accounts Rec. |
$2,964 |
$2,702 |
9.7% |
|
Inventory |
$524 |
$540 |
(3%) |
|
Liabilities |
FY 2007 |
FY 2006 |
Change |
|---|---|---|---|
|
Accounts Payable |
$1,428 |
$1,446 |
(1.2%) |
|
Long-Term Debt |
$1,265 |
$1,078 |
17.3% |
The balance sheet reflects the company's health.
Cash Flow Highlights
|
FY 2007 |
FY 2006 |
Change |
|
|---|---|---|---|
|
Cash From Ops. |
$958 |
$640 |
49.7% |
|
Capital Expenditures |
$488 |
$388 |
25.8% |
|
Free Cash Flow |
$470 |
$252 |
86.5% |
|
$912 |
$67 |
1,261.2% |
Free cash flow is a Fool's best friend.
Related Foolishness:
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, Anders Bylund had no position in any company mentioned. Fool rules are here.
