On Sept. 27, middleware maker TIBCO Software (NASDAQ:TIBX) released third-quarter earnings for the period ended Sept. 2.

  • Hot on the heels of a disappointing second-quarter report, the third-quarter installment isn't much better.
  • This is the slimmest gross-margin performance we've seen from TIBCO since the spring of 2005, and the weakest net income margin of the past four years.
  • But all is not gloom and doom: The company spent around $84 million on repurchasing its own stock this quarter. Together with the $101 million buyback in the previous quarter, it's the largest six-month buyback in company history.
  • In our Motley Fool CAPS community, TIBCO is a three-star stock with a four-star history, much like rivals BEA Systems (NASDAQ:BEAS) and IBM (NYSE:IBM). Other competitors, including Oracle (NASDAQ:ORCL) and DST Systems (NYSE:DST), fare better than that today.

(Figures in millions, except per-share data)

Income Statement Highlights

Q3 2007

Q3 2006

Change

Sales

$135

$120

12.2%

Net Profit

$4.6

$11.3

(58.8%)

EPS

$0.02

$0.05

(60.0%)

Diluted Shares

200.1

214.5

(6.7%)

Get back to basics with the income statement.

Margin Checkup

Q3 2007

Q3 2006

Change*

Gross Margin

69.4%

72.2%

(2.8)

Operating Margin

2.1%

10.5%

(8.3)

Net Margin

3.4%

9.3%

(5.9)

*Expressed in percentage points.

Margins are the earnings engine.

Balance Sheet Highlights

Assets

Q3 2007

Q3 2006

Change

Cash + ST Invest.

$224

$521

(57.1%)

Accounts Rec.

$115

$93.3

23.0%

Liabilities

Q3 2007

Q3 2006

Change

Accounts Payable

$8.6

$10.5

(18.0%)

Long-Term Debt

$47.3

$48.8

(3.2%)

The balance sheet reflects the company's health.

Cash Flow Highlights

Q3 2007

Q3 2006

Change

Cash From Ops.

$19.3

$48.1

(59.8%)

Capital Expenditures

$3.4

$3.5

(2.8%)

Free Cash Flow

$15.9

$44.5

(64.3%)

Owner Earnings

$13.4

$15.5

(13.6%)

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, Fool contributor Anders Bylund had no position in any company mentioned. Fool rules are here.